How some are surviving or thriving in a down HECM market
At the risk of channeling Yogi Berra,- all HECM markets are local. Perhaps we should embrace Berra’s statement that ‘the future ain’t what it used to be”. One of the biggest challenges any industry, city or individual can face is to embrace the reality that things will never be like they were before and look for new ways to succeed in the new normal of doing business.
Reverse mortgage volumes predictably declined sharply in the wake of HUD’s most recent changes to the Home Equity Conversion Mortgage which significantly reduced lending ratios for borrowers after October 2nd. Month-to-month HECM endorsements fell nearly 18% in February- April endorsement dropped 23%. It is in lean times such as this when market research an invaluable resource.
Local markets are as unique and varied as the residents who live in them. The key is learning how to strategically leverage your local market. “For originators that are active locally, there are always top 10 zip codes with significant production in their immediate area where they have zero market share. ALWAYS”, says John Lunde, President of Reverse Market Insight. Considering the time and expense entailed in HECM marketing it is surprising how few actually analyze their markets. Tools such as Reverse Market Insight’s paid service- the Retail Dashboard-provide a wealth of local market data including who is originating loans in your area, home values, and market size. Their free research data includes HECM Trends ranking the top cities for HECM growth and key zip codes, and the HECM Lenders industry overview showing the market performance of 82 key metros across the U.S.
Since October 2nd I have spoken with over a dozen HECM professionals. For those who have stabilized or grown their production, I’ve found several recurring traits. One is …