Navigating the complex landscape of the reverse mortgage industry in July showed a mix of ups and downs, as detailed by industry analysts.
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HECM Endorsements
- Home Equity Conversion Mortgage (HECM) endorsements rose by 8% from June to July, totaling 2,274, aligning closely with Federal Housing Administration (FHA) HECM case numbers as per data compiled by Reverse Market Insight (RMI).
- HMBS Issuance
- Conversely, HECM-backed Securities (HMBS) issuance saw a decline of $47 million in July, totaling $450 million for the month across 80 pools according to Ginnie Mae data and data from New View Advisors.
The fluctuating data prompted RMI’s HECM Lenders to describe the recent months as a "yo-yo," suggesting a lack of consistency in the industry’s performance trends. While some top lenders experienced a decline in endorsements, others saw significant year-to-date growth in HECM volume due to strategic acquisitions and expanded business efforts.
- Guild Mortgage reported a 1,700% increase, largely attributed to acquiring Cherry Creek Mortgages.
- Movement Mortgage showed a 257% increase due to team expansions.
- CrossCountry Mortgage and CMG Financial both experienced substantial year-to-date growth through revised business strategies and investments.
- Guaranteed Rate rebranded as Rate and saw an 870% increase, reflecting positive impacts from leadership changes and strategic decisions.
As discussions around mortgage rate reductions gain momentum, potential decreases could influence HECM business for the year, especially concerning HECM-to-HECM (H2H) refinances which have been low since the rise in rates.
The July HMBS issuance drop was labeled as "sharp" by New View Advisors, noting HMBS securitizations near historic lows, potentially offset by the development of "HMBS 2.0" designed to boost HMBS issuance by financing mandatory buyouts. Despite low issuance figures, the overall HMBS program remains robust according to industry experts.
Finance of America (FOA) maintained its top issuer position in July, followed by Longbridge Financial, PHH Mortgage Corp., and Mutual of Omaha Mortgage, with no pools issued by the former Reverse Mortgage Funding (RMF) portfolio. New View partner Michael McCully echoed optimism about the HMBS program’s health despite low activity, indicating a possible positive impact on industry momentum with a notable decrease in the 10-year Treasury rate.
In navigating the reverse mortgage landscape, industry stakeholders must remain agile and proactive to maximize opportunities and adapt to changing market conditions.
