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2012 HECM Volume Slowest in Years as Landscape Changes

Mortgage News

The federal government insured fewer reverse mortgages last month, while annual production has slowed to the lowest level in years. But new leaders emerging in the sector have some up-and-coming traditional lenders behind them.

There were 3,912 home-equity conversion mortgages endorsed by the Federal Housing Administration during December.

Volume declined from a month earlier, when 4,436 HECMs were insured by FHA. Business was also worse than December 2011, when 4,636 HECMs were originated.

According to Reverse Market Insight, which delivered the data, full-year 2012 HECM production totaled 52,992 endorsements, fewer than the 68,694 federally insured reverse mortgages originated in 2011.

Based on calendar-year data back to 2009, last year was the slowest. Fiscal data indicate that HECM endorsements haven’t been this slow since fiscal-year 2005, when 42,921 HECMs were endorsed.

Last year’s biggest HECM lender is no longer in business: MetLife Bank. Annual activity at MetLife amounted to 6,790, fewer than the 10,512 originated in 2011.

No. 2 during 2012 was One Reverse Mortgage LLC. Business climbed to 4,803 HECMs during 2012 at One Reverse from the prior year’s 4,619.

One Reverse is a subsidiary of Quicken Loans Inc., which has been adding employees and growing traditional originations at a rapid pace. Quicken, which didn’t even rank among the 10-biggest lenders in 2009, leapt to No. 5 in the third quarter based on data maintained by Mortgage Daily.

The third-largest reverse mortgage lender last year was Liberty Home Equity Solutions, where annual production climbed to 4,712 units from 2,310 a year earlier.

Liberty, which previously operated as Genworth Financial Home Equity Access Inc., is expected to be acquired by Ocwen Financial Corp. during the first quarter. Ocwen has been beefing up its mortgage servicing portfolio and building a production platform through other acquisitions.

Liberty was the biggest HECM originator during December, with volume jumping to 573 loans from 396 in November.

Security One Lending came in fourth for last year with 3,842 HECMs endorsed. Volume has surged from 2011, when 1,493 HECMs were originated.

Security One was the second-biggest HECM lender in December with 421 closings versus 477 in November.

An announcement Wednesday indicated that an agreement was reached for Walter Investment Management Corp. to acquire Security One in a $31 million deal. Like Ocwen, Walter has been enhancing its production and servicing assets, including its recent acquisition of Reverse Mortgage Solutions.

Last year’s fifth-biggest HECM originator was American Advisors Group, where volume jumped to 3,690 mortgages from 1,815 a year earlier.

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