Despite challenges there is reason for measured optimism
If you’ve been originating reverse mortgages for longer than a few weeks or paying attention to recent developments you’ve probably felt the impact of our collective dependence on a singulargovernment-insured loan and heard the dire warnings of a continued decline in loan volume. But not unlike most drastic proclamations of doom and gloom the truth lies between the extremes.
All which brings us to the question- is the reverse mortgage or HECM market in a continued downward trajectory? The number of FHA case number assignments issued for new HECM applications serves as an accurate leading indicator of consumer interest in the loan. The average number of HECM case numbers issued in both 2016-17 averaged nearly 7,000 per month. Predictably case numbers plummeted after last September’s rush to beat October 2nd HECM cutbacks in the wake of a record 20,408 new applications. Yet despite this aberration today application volume is steadily climbing an average of 9 percent in the first 3 reported months of 2018. Interestingly, if that trend were to continue