After falling to the lowest level in more than six years, the number of reverse mortgages that were insured by the government bounced up last month. But the sector faces an uphill battle with yet another exit by a big player.
The Federal Housing Administration previously reported that it endorsed just 4,381 home-equity conversion mortgages during March.
HECM production hadn’t been that low since September 2005.
Reverse Market Insight, which delivered the data, reported that the origination of FHA-insured mortgages was higher in April at 4,595 HECMs.
Business has dropped off significantly since April 2011, when 6,124 HECMs were endorsed.
From Jan. 1 through April 30, total HECM production was 19,577.
Despite the 5 percent bump in month-over-month endorsements, a dark cloud looms over the reverse mortgage sector with the April 26 announcement that MetLife Bank would exit the market.
MetLife closed 911 HECMs in April — the most of any lender and 20 percent of the entire HECM market. Volume at MetLife was 929 in March.
Other high-profile companies to exit from reverse mortgage lending during the past year or so include SunTrust Mortgage Inc., Wells Fargo Home Mortgage, Financial Freedom and Bank of America Home Loans.
The No. 2 HECM originator last month was One Reverse Mortgage LLC, where volume rose to 407 units from March’s 384.
Genworth Financial Home Equity followed with 346 HECMs, then American Advisors Group’s 293 and Urban Financial Group’s 281.
There were just 443 active lenders during April, far fewer than the 1,188 in April 2011.
