Reverse Production Soaring

More than 43,000 home equity conversion mortgages were insured by the Federal Housing Administration during the fiscal year ended Sept. 30, according to an announcement from the National Reverse Mortgage Lenders Association today. The figure is up from 37,829 loans the prior year.

The Washington, D.C.-based group said home equity conversion mortgages represent 90% of all U.S. reverse mortgages.

Four of the top five reverse mortgage markets were located in California, the announcement said.

An informal poll of Financial Freedom Senior Funding Corp., Seattle Mortgage Co. and Wells Fargo Home Mortgage — the three largest reverse lenders in the country — indicated that applications currently in process are 56% higher than a year ago, the announcement said. This was further substantiated by the Department of Housing and Urban Development, which reported the number of reverse loans in the pipeline and not yet insured at the end of September was 36,952, up from 21,838 a year earlier, according to the group.

Volume was lower than it could have been because it’s taking twice as long to schedule mandatory counseling, Peter Bell, the association’s president, said in the statement.

“Put simply, there aren’t enough counselors to handle the high volume of requests,” Bell said. “Fortunately, senior-level staff at HUD have been aggressively attacking the problem to put in place long-term permanent solutions.”