The volume of reverse mortgages insured by the federal government descended last month, leaving annual activity at the lowest level in 13 years. New appraisal requirements are likely to exacerbate the slowdown.
During September, there were 2,880 home-equity conversion mortgages that were endorsed by the Federal Housing Administration — the second-slowest month on record since at least December 2008.
HECM production was 3,197 endorsements as of one month previous. During the same month last year, FHA endorsed 4,592 units through the program.
Based on historical data from Reverse Market Insight, which reported the latest numbers on Monday, FHA endorsed 34,341 HECMs during the nine months ended Sept. 30.
During the entire fiscal-year 2018, which began on Oct. 1, 2017, HECM endorsements amounted to 48,385 —
falling from 55,336 units the prior year to the lowest level since 42,921 HECMs were endorsed in fiscal-year 2005.
FHA’s recent policy change requiring second appraisals for some HECMs is likely to only hamper future production.
344 FHA mortgagees that were responsible for HECMs endorsed from Jan. 1, 2018, through Sept. 30. The number of active mortgagees dropped from 390 in 2017.
American Advisors Group solidly maintained its status as the biggest originator of HECMs with 778 endorsements. No. 2 Finance of America Reverse LLC generated 256 endorsements. Next was Liberty Home Equity Solutions Inc., which had the only gain among the top originators — 202 endorsements last month versus just 124 in August. After that was One Reverse Mortgage LLC’s 198 endorsements, and 178 at Reverse Mortgage Funding LLC.