January experienced a surge of Home Equity Conversion Mortgage (HECM) endorsements, according to Reverse Market Insight [1] (RMI) data that showed a 10.8% increase to 4,539 loans for the month.
Volumes for January 2021 were the highest seen in the industry since May 2020, a particularly explosive month wherein the volume shot to more than 5,000 loans.
January's numbers built on an uptick that started in December; prior to that, HECM activity had declined during the last few months of 2020.
According to RMI, January stats indicate "quite a positive start for the year."
Lenders were only slightly less buoyant, with 7 of the top 10 up to start the year. RMI bulleted its takeaways as follows:
- Hightech rose 67.9% to 94 loans
- Longbridge endorsed 280 loans, a gain of 46.6% and their highest total ever on this report
- RMF leaped 38.9% to finish with 603 loans
In an interview with Reverse Mortgage Daily's Chris Clow [2], RMI President points out that, though the volume hasn't outpaced May, it is nevertheless impressive.
"I agree this is a bit of a surprise, but it does underline that Q4 [2020] fundings were stronger than the endorsements indicated. While possible that some of the additional volume activity is linked to the impending retirement of the LIBOR index for HECM loans, that is likely more plainly seen in the HMBS data," he told Clow.
By region, RMI reports, "for the second straight month we saw eight of the 10 regions increase volume compared to the prior month," and they added the following details:
- Mid-Atlantic more than recovered from a slight dip in December, jumping 40% to 273 loans
- Northwest/Alaska leaped a second month in a row, rising 30.1% to 553 loans for its highest monthly total in over a year
- Midwest joined the party too, gaining 19.5% to 276 loans
“The regional trends are interesting to me in that we don’t know yet how much of each region’s strength is driven by HECM for Purchase (H4P) vs. refi vs. traditional volume,” Lunde told RMD's Chris Clow. “All of those benefit from higher home prices, which can benefit from low inventory, but this first take is really just that in thinking about regions and metros around the country. With more granular data in our HECM Originators and Trends reports, we’ll have a clearer picture. And, of course, our paid clients have access to all of that detail in our Retail Dashboard.”
New View Advisors HMBS issuance report for January shows a totaled $949 million in January 2021, "as issuers began to wrap up securitization of new LIBOR-indexed HECM loans," New View reports.
January 2021 is the next-to-last month in which Ginnie Mae will allow pooling of new HMBS pools backed by first participations of LIBOR-based HECMs, New View noted in its report. "81 pools were issued in January; 12 pools totaling about $191 million were pools backed by new LIBOR loans."
Access the entire lenders report at rminsight.net [1] and the full Reverse Mortgage Daily article by Chris Clow at Reversemortgagedaily.com [2].