The Refi Boom and the Economic Stimulus Sugar Rush

economic sugar rush housing refinances

The Federal Reserve’s interest rate cuts and government economic stimulus have given our economy a pure sugar rush. One of the early manifestations of this ‘sugar high’ can be found in the mortgage market’s surge of refinancing activity.

Traditional mortgage refinances are 50% higher than a year ago according to the Mortgage Bankers Association. Home Equity Conversion Mortgage refinance transactions also climbed from an average of 5.4% in 2019 to an average of 20% of all FHA case numbers issued for the federally-insured reverse mortgage. In fact, August set a new high for refinance activity with 36% of all HECM case numbers being HECM-to-HECM refis transactions.

Against this backdrop fiscal year 2020 endorsements for the HECM grew 34% over 2019. A considerable part of that increase can be attributed to this new yet anticipated spike in HECM refinance activity.

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Let’s Talk About the HECM for Purchase


Why you should consider adding the H4P to your sales tool bag

reverse mortgage newsThe HECM for Purchase provides you with unique opportunities to open up the conversation about…

About John Luddy: John has trained reverse mortgage professionals how to be successful when sitting face-to-face at the kitchen table with prospective HECM borrowers. Norcom is looking for qualified loan officer candidates. To learn more call 1-860-507-2582 or email John Luddy here

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When No Advice is Worse Than Bad Advice

ePath 100K RM leads

Professionals not providing all options can have devastating consequences

“Failing to provide a client with viable options can be just as damaging, if not worse than providing poor advice”

Screen Shot 2017-05-05 at 10.19.24 AMSuch is the case in a recent post I read on LinkedIn from Florian Steciuch. He wrote “ My definition of heartbreak – meeting with an 82 year old client who was given a 30 year mortgage when she bought her new town home last year. Recently she lost her part-time job, now has Social Security of [sic] $1300 with a mortgage P+I of $700. She already missed her property tax payment. She provided a down payment of 50% – this is a prime example of why the FHA HECM for Purchase was a far superior loan option. She would have had NO mortgage payment. She was not offered this option because her bank did not offer it. 80 year old home owners should not be taking on the risk of 360 months of mortgage payments if they have a substantial down payment.”

Perhaps this 82 year old would have averted disaster had she read an article similar to Jack Guttentag’s, aka ‘The Mortgage Professor’ latest contribution in the Huffington Post, “Purchasing a House with a HECM Reverse Mortgage: How to Do It Right”. Guttentag opens stating “Purchasing a house with a HECM reverse mortgage has the great advantage that it does not impose a monthly payment burden on the borrower.”