Archive for the ‘HECM Program’ Category

HECM Endorsement Analytics – September 2020

Monday, October 5th, 2020

HUD’s September 2020 HECM Endorsement Summary Report totals 3,937 endorsements, a slight drop from last month’s 4,007 but still a pace not seen since FY2017. New View Advisors’ summary report can be found here: NV Endorsement 2020_09. Endorsements have been stable for the last four months, fluctuating by no more than 300 units a month.

Endorsements by region mirror the national dynamic; none of the home ownership centers or major field offices experienced any material change in volume. Among the top originators of note, Open Mortgage endorsed 236 loans, a 33% increase from August; Longbridge endorsed 167 loans, a 39% drop from August.

HUD’s August Endorsement Snapshot Report is now posted on its website. The Top-4 wholesale sponsors endorsed 1,109 loans originated by another party, a drop from last month’s 1,375 loans. Despite the drop, Longbridge’s wholesale increased 28% with 361 units compared to last month’s 281, and Open Mortgage increased its count 55% with 115 sponsorships compared to last month’s 74.

The August Snapshot Report also shows 1,120 endorsements labeled as HECM to HECM refis, 28% of total endorsements, nearly equal to the surge of refinancings from when FY2017 drew to a close three years ago. Ginnie Mae’s unexpected announcement last week ending LIBOR-indexed HMBS effective 2021 will likely alter the HECM to HECM refinance landscape, and impact HECM origination volume until a permanent replacement for LIBOR is established.

New View Advisors continues to offer its Who Buys What From Whom (WBWFW) report as part of our endorsement report subscription. The report compiles publicly available Ginnie Mae data to show which HMBS issuers buy HECMs from which lenders.

The WBWFW report includes:
–Top Originators – a ranking by original HECM UPB of all lenders over the last twelve months
–WBWFW – an alphabetical cross-reference between every lender and the HMBS issuer that securitizes its loans
–Top 100 Trends – a breakdown of loan sales by month, by Top-100 lender, by HMBS issuer.

Edited samples from this month’s WBWFW report are at the end of our endorsement writeup. These reports together provide accurate insight for sales and marketing teams to learn just who’s buying what from whom. The dataset is more complete and timely than what endorsement analysis alone can show.

HECM Endorsement Analytics – August 2020

Wednesday, September 2nd, 2020

HUD’s August 2020 HECM Endorsement Summary Report shows a fourth consecutive strong print month, with 4,007 endorsements, our summary report of which can be found here: NV Endorsement 2020_08. For May, June and July, monthly endorsement counts were 5,038, 4,209 and 4,256, respectively. For comparison, there were just 2,341 endorsements a year ago in August 2019.

All major originators had strong performance in August including AAG continuing its lead with 1/3 of all endorsements. Compared to a year ago, Longbridge and Open Mortgage both increased endorsement originations by approximately 50%, each moving from approximately 2% to 3% market share.

HUD’s July Endorsement Snapshot Report is also now posted on its website. Fairway remains the commanding leader, originating 1,572 loans sponsored by another party over the last 12 months, followed by Ennkar, Finance of America, All Reverse Mortgage and Advisors Mortgage, each originating more than 400 such loans during the period. FAR sponsored 4,730 loans originated by another party during the last 12 months, followed by Liberty, RMF and AAG. Each sponsored more than 2,000 such loans over the course of the year.

New View Advisors continues to offer its Who Buys What From Whom (WBWFW) report as part of this endorsement report subscription. Edited samples from this month’s WBWFW report are at the end of our endorsement writeup. The dataset is more complete and timely than what endorsement analysis alone can show.

HECM Endorsement Analytics – July 2020

Monday, August 3rd, 2020

HUD’s July 2020 HECM Endorsement Summary Report shows no signs of HECM endorsements slowing down: NV Endorsement 2020_07.  July closed out with 4,256 endorsements, the third consecutive month over 4,000. The last time this happened was in the fourth quarter of 2017, during the surge of volume associated with Mortgagee Letter 2017-12.

Based on 12-month endorsement totals, the ranking of the top 15 originators for July 2020 remained the same as June. As with HMBS issuance, AAG has a commanding lead over #2 RMF and #3 FAR. Longbridge saw unit count more than double in July, to 199 loans endorsed from last month’s 97. On the other hand, High Tech Lending’s endorsement count fell 44%, to 95 units from last month’s 169.

HUD’s June 2020 Endorsement Snapshot Report has now been posted on its website. While HUD’s Snapshot Report has a 1-month lag, it too shows no notable changes in trends with regard to endorsement volume, product mix, or loan characteristics.

New View Advisors continues to offer its Who Buys What From Whom (WBWFW) report as part of this endorsement report subscription. The report compiles publicly available Ginnie Mae dollar volume data to show which HMBS issuers buy HECMs from which lenders.

Edited samples from this month’s WBWFW report are at the end of our endorsement writeup. These reports together provide accurate insight for sales and marketing teams to learn just who’s buying what from whom. The dataset is more complete and timely than what endorsement analysis alone can show.

HECM Endorsement Analytics – May 2020

Monday, June 1st, 2020

HUD’s May 2020 HECM Endorsement Summary Report shows a total of 5,038 endorsements, the highest monthly endorsement tally we’ve seen in over two years, and a 215% increase from last month’s 1,601. Our summary and analysis can be found here: NV Endorsement 2020_05. Granted, a significant portion of this month’s endorsement volume is likely backlog from April due to the slowdown in loan processing caused by the pandemic. During the six months prior to April, average monthly endorsements ran slightly over 3,000.

The Endorsement Summary Report replaced Synergy One Lending with its parent company Mutual of Omaha Mortgage and our numbers present the combined endorsement count. Similarly, PHH Mortgage Corporation was added to the report as an originator. Even though HUD’s data still shows Liberty Home Equity solution as a separate originator, our report combines their numbers as one line item.

Based on 12-month endorsement totals, the same six lenders occupy the top originator spots from a year ago. One Reverse Mortgage aside, all of these originators have more endorsements today than a year ago. AAG’s endorsement total is now 32% of the market total, up from 29% in May 2019. During the same 12-month period, and still including ORM, the market share of combined endorsements from these six originators increased from 63% to 66%.

HUD’s April Endorsement Snapshot Report is now available on its website. The report shows that most sponsors were quiet in April, however FAR and Longbridge actively sponsored loans originated by another party. FAR sponsored 407 and Longbridge sponsored 103 such loans, compared to 305 and 107 on average respectively over the previous 12 months.

New View Advisors continues to offer its Who Buys What From Whom (WBWFW) report as part of this endorsement report subscription. The report compiles publicly available Ginnie Mae data to show which HMBS issuers buy HECMs from which lenders. The WBWFW report includes:

  • Top Originators – a ranking by original HECM UPB of all lenders over the last twelve months
  • WBWFW – an alphabetical cross-reference between every lender and the HMBS issuer that securitizes its loans
  • Top 100 Trends – a breakdown of loan sales by month, by Top-100 lender, by HMBS issuer.

Edited samples from this month’s WBWFW report are at the end of our endorsement writeup. These reports together provide accurate insight for sales and marketing teams to learn just who’s buying what from whom. The dataset is more complete and timely than what endorsement analysis alone can show.

HECM Endorsement Analytics – April 2020

Monday, May 4th, 2020

HUD’s April 2020 HECM Endorsement Summary Report shows a total of just 1,601 endorsements, New View Advisors’ summary and analysis of which can be found here: NV Endorsement 2020_04. The impact of Coronavirus is undoubtedly the culprit of the slowdown. Lending activities have stalled meaningfully. The secondary market for the HMBS program has stabilized during the past month, but nobody is expecting the market to return to pre-pandemic execution any time soon. Back-end liquidity remains a concern for the industry. Time will tell whether April’s low endorsement count will be overshadowed by new opportunity to provide HECM loans to seniors, those most affected by Covid-19.

Geographically the slowdown is widespread. Notably, many major field offices on the west coast recorded endorsements less than half of counts from the previous month. For example, San Francisco and Seattle had 55 and 49 endorsements compared to 137 and 126 respectively in March. Salt Lake City and Denver saw drastic declines as well, with endorsements dropping to 56 and 132 in April, down from 109 and 247 in March. Numbers in southern locales are more mixed. Miami only had 29 endorsements compared to March’s 80, while Houston had 44 versus March’s 47.

Several top originators stand out in the decline of endorsements. Synergy One Lending, Open Mortgage, High Tech Lending, and Cherry Creek Mortgage all had zero endorsements for the month. Reverse Mortgage Funding and Liberty Home Equity Solution saw their endorsement count decline by 91% and 70% month-over-month, respectively.

The March Endorsement Snapshot Report is now available on HUD’s website. This report does not show notable changes in HECM endorsement volume because it is released with a one-month lag. Next month’s report will likely be more illuminating.

New View Advisors continues to offer its Who Buys What From Whom (WBWFW) report as part of this endorsement report subscription. The report compiles publicly available Ginnie Mae dollar volume data to show which HMBS issuers buy HECMs from which lenders. The WBWFW report includes:

1.  Top Originators – a ranking by original HECM UPB of all lenders over the last twelve months
2.  WBWFW – an alphabetical cross-reference between every lender and the HMBS issuer that securitizes its loans
3.  Top 100 Trends – a breakdown of loan sales by month, by Top-100 lender, by HMBS issuer.

Edited samples from the WBWFW report are at the end of our endorsement summary. These reports together provide accurate insight for sales and marketing teams to learn just who’s buying what from whom. The dataset is more complete and timely than what endorsement analysis alone can show.

Financial Assessment Is Working (Part VI)

Monday, April 20th, 2020

Financial Assessment is still working. Now in its sixth year, FHA’s policy of requiring the financial assessment (FA) of borrowers’ ability to pay has cut tax and insurance (T&I) defaults by over 75% and serious defaults by over two-thirds. These results continue to validate the encouraging data we shared in previous years.

FHA’s objective for its Financial Assessment regulations was to reduce the persistent defaults, especially T&I defaults, plaguing the HECM program in 2009-2014. As FHA put it, “… an increasing number of tax and hazard insurance defaults by mortgagors led FHA to establish … a requirement for a Financial Assessment of a potential mortgagor’s financial capacity and willingness to comply with mortgage provisions.” Financial Assessment requirements became effective for HECMs with case numbers issued on or after April 27, 2015. Since then, HECM lenders make a financial assessment of borrowers’ ability to meet their obligations, including property taxes and home insurance. T&I and other defaults can lead to foreclosure and result in significant losses to FHA, HMBS issuers, and other HECM investors. Defaults rose steadily during the financial crisis and remained a thorn in the side of the program until Mortgagee Letters 2014-21, 2014-22, and 2015-06 were released.

It’s been five years since Financial Assessment began, so we can measure with increasing confidence the effect of this policy by comparing default rates of loans originated before and after the FA rule was implemented.

With this in mind, we looked at a data set of more than 200,000 HECM loans, comparing loans originated in the immediate 57 month post-FA period from July 2015 through March 2020 to loans originated in the 57 month pre-FA period from July 2010 through March 2015. After July 2015, there were few (if any) loans originated under pre-FA guidelines. As Financial Assessment took effect in April 2015, the second quarter of 2015 included a mix of FA and pre-FA loans.

The data show a very strong reduction in T&I defaults in the post-FA period. As of March 31, 2015, the pre-FA data set had a T&I default rate of 4.7%, and an overall serious default rate of 6.8%. As of March 31, 2020, the comparable post-FA data set shows a T&I default rate of approximately 1.1%, and an overall serious default rate of 2.2%. For the purpose of this analysis, we define serious defaults as T&I defaults plus foreclosures plus other “Called Due” status loans.

Over the past few years, FHA has taken a number of steps to reduce defaults in its HECM program. These include Mortgagee Letter 2013-27, which limits in certain cases the amount that can be lent in the first 12 months. Also, a series of Principal Limit Factor (PLF) reductions has reduced the amount lent even when the loan is fully drawn.

Given these results, we continue to give Financial Assessment high marks for reducing defaults. Previously, we referred to these results as a “mid-term grade that needs to be tested further as the post-FA portfolio ages.” After nearly 5 years of experience, it is clear the HECM program has graduated to a sounder credit footing. The coming months will show how well this reformed HECM program weathers a likely serious economic downturn.

New View Advisors compiled this data from publicly available Ginnie Mae data as well as private sources.

HECM Endorsement Analytics – February 2020

Monday, March 2nd, 2020

HUD’s February 2020 HECM Endorsement Summary Report shows a total of 3,386 endorsements. It is lower than last month’s 3,919, but adjusted for day count a very strong number considering the previous 12 months averaged fewer than 2,900 units. Our summary can be found here: NV Endorsement 2020_02. While HMBS issuance is a more accurate barometer of current HECM originations, endorsement count does provide reasonable long-term trend vectors.

AAG had 691 endorsements, a significant drop from last month’s 1,141 endorsements. Liberty Home Equity Solutions kept its strong pace and endorsed 582 loans, 107 more than last month. Fairway endorsed 150, almost matching its record from Jan 2018. Live Well Financial has finally dropped off the top 15 originators list.

HUD’s January Endorsement Snapshot Report is now published on their website. Liberty Home Equity Solutions sponsored 501 loans originated by another lender. Finance of America Reverse, AAG, and Reverse Mortgage Funding followed with 333, 264, and 263 loans, respectively. Fairway sold 93 loans to another sponsor, followed by Ennkar with 63.

New View Advisors continues to offer its Who Buys What From Whom (WBWFW) report as part of this endorsement report subscription. The report compiles publicly available Ginnie Mae dollar volume data to show which HMBS issuers buy HECMs from which lenders. The WBWFW report includes:

Top Originators – a ranking by original HECM UPB of all lenders over the last twelve months

WBWFW – an alphabetical cross-reference between every lender and the HMBS issuer that securitizes its loans

Top 100 Trends – a breakdown of loan sales by month, by Top-100 lender, by HMBS issuer.

Edited samples from this month’s WBWFW report are at the end of our endorsement writeup. These reports together provide accurate insight for sales and marketing teams to learn just who’s buying what from whom. The dataset is more complete and timely than what endorsement analysis can show.

HECM Endorsement Analytics – January 2020

Monday, February 3rd, 2020

HUD’s January 2020 HECM Endorsement Summary Report shows 3,919 endorsements, a strong start for the year, though volume may include backlogged pipeline from year-end. Our summary can be found here: NV Endorsement 2020_01. The increase in volume is evenly distributed geographically. Compared to December, the Atlanta field office volume increased 66%, from 452 to 751 units; the Denver field office increased 40%, from 573 to 801 units; the Philadelphia office increased 89% from 380 to 718 units; and the Santa Ana field office saw its unit volume increase 56%, from 1,056 to 1,649 units. Overall, January volume increased 59% from December, and it is the highest monthly endorsement volume since February 2019.

AAG continues to hold its lead with more than 30% of origination volume, or 1,141 endorsements. After Liberty’s uncharacteristically tiny endorsement volume in December, it bounced back with 475 endorsements in January, its strongest performance since February 2018. Reverse Mortgage Funding came in third with 361 endorsements. The top six originators each had market share exceeding 5%, with a combined market share of roughly 67%. The market has consolidated over the last 12 months; one year ago, the top six originators had a combined 62% market share.

HUD just released its December Endorsement Snapshot Report and RMF sponsored 243 loans originated by another lender. Finance of America Reverse and AAG followed with 187 and 160 such loans respectively. Fairway sold 48 loans to another sponsor in December; like other smaller players, Fairway’s production has been in a downward trend over the last 12 months.

New View Advisors continues to offer its Who Buys What From Whom (WBWFW) report as part of this endorsement report subscription. The report compiles publicly available Ginnie Mae data to show which HMBS issuers buy HECMs from which lenders. Our WBWFW report includes:

Top Originators – a ranking by original HECM UPB of all lenders over the last twelve months
WBWFW – an alphabetical cross-reference between every lender and the HMBS issuer that securitizes its loans
Top 100 Trends – a breakdown of loan sales by month, by Top-100 lender, by HMBS issuer.

Edited samples from this month’s WBWFW report are at the end of our endorsement writeup. These reports together provide accurate insight for sales and marketing teams to learn just who’s buying what from whom. The dataset is more complete and timely than what endorsement analysis alone can show.

HECM Endorsement Analytics – December 2019

Wednesday, January 8th, 2020

HUD’s December 2019 HECM Endorsement Summary Report shows a total of 2,461 endorsements. Our summary can be found here: NV Endorsement 2019_12 WBWFW. The monthly year-over-year increase is nearly 40%; however, that metric is skewed by muted endorsement activities from December 2018 as a result of last year’s government shutdown. The December 2019 endorsement count is lower than November’s 2,842 and October’s 3,296. As discussed previously, we believe part of the increase in volume in early Q4 can be attributed to lower interest rates. Rates have increased since, and it has likely dampened December endorsement volume.

Most of the top originators have seen endorsement volume declines since October; notably, Liberty Home Equity Solutions only had 2 in December, the first time Liberty had a single digit monthly endorsement count since January 2013. Reverse Mortgage Funding had a strong month with 303 endorsements, the company’s best month since March 2018.

By regions, the Santa Ana field office had 1056 endorsements, a 4% increase over the previous 11-month average. The other field offices however, all had decreases in December. Denver, Atlanta, and Philadelphia had 8%, 20%, and 28% decreases respectively from their previous 11-month averages.

HUD also just released its November 2019 Endorsement Snapshot Report. The report shows that Finance of America Reverse sponsored 322 loans originated by another lender in November, maintaining its lead among sponsors. AAG also had a strong month with 200 sponsored loans in November. Fairway sold 75 loans to another sponsor in November. Fairway’s still the most active seller, but the number of loans sold is significantly lower than the 99 and 103 loans it sold in September and October.

We noted last month that refinanced HECMs have made a come back of late. The November Endorsement Snapshot Report shows there were 391 ‘HECM for Refinance,’ its highest level since April 2018. As a percentage it accounts for over 13% of all HECM endorsements. It is also worth noting that fixed rate HECM endorsements have been dwindling steadily since 2018Q3. For several years prior, fixed rate HECM endorsements averaged 400+ loans per month. Since June 2019, fixed rate HECM endorsements have not exceeded 85 loans per month.

New View Advisors continues to offer its Who Buys What From Whom (WBWFW) analysis as part of this endorsement report subscription. The report compiles publicly available Ginnie Mae data to show which HMBS issuers buy HECMs from which lenders. WBWFW includes:

  • Top Originators – a ranking by original HECM UPB of all lenders over the last twelve months
  • WBWFW – an alphabetical cross-reference between every lender and the HMBS issuer that securitizes its loans
  • Top 100 Trends – a breakdown of loan sales by month, by Top-100 lender, by HMBS issuer

Edited samples from this month’s WBWFW report are at the end of our endorsement writeup. These reports together provide accurate insight for sales and marketing teams to learn who’s buying what from whom. The dataset is more complete and timely than what endorsement analysis can show.

HECM Endorsement Analytics – October 2019

Monday, November 25th, 2019

HUD’s October 2019 HECM Endorsement Summary Report shows a total of 3,296 endorsements; it is a 36% increase from September’s 2,420 endorsements. Our summary can be found here: NV Endorsement 2019_10.  Other than in February 2019, when the market recovered from the year-end slowdown and reached over 4,000 endorsements, October’s endorsement count is the strongest since May 2018. Part of the increase in volume can be attributed to lower interest rates. Now that interest rate declines have stalled, it remains to be seen if higher endorsement volume will continue.

Based on annual endorsement count, the ranking of the top 15 originators changed only slightly. Most notably, Open Mortgage had 108 endorsements in October. It is the first time Open Mortgage has exceeded 100 endorsements since 2018Q1.

HUD released its September and October Endorsement Snapshot Reports simultaneously. The reports show that Finance of America Reverse sponsored 288 and 273 loans originated by another lender in September and October, respectively, maintaining its lead in this category. American Advisors Group sponsored 200 such loans in October. That’s the highest number American Advisors Group has produced since February 2018. Fairway sold 99 and 103 loans to another sponsor in September and October, still by far the most active seller of HECM closed loans.

HUD’s Snapshot Report breaks down endorsements by type. From 2016 to the beginning of 2018, between 10% and 20% of HECM endorsements were for refinance. From March 2018 until August 2019, that percentage dropped to approximately 5% per month. However, during the last two months, HECM Refinance endorsement count has crept back to more than 10% of total endorsement volume.

New View Advisors released its October update of the Who Buys What From Whom (WBWFW) report. As a reminder, the WBWFW report compiles publicly available Ginnie Mae data to show which HMBS issuers buy HECMs from which lenders. One of the reports displays loans sales by month, by top 100 lender, by HMBS issuer. The October update shows that over the past 12 months, 63% of total origination/securitization volume was sold from originators to HMBS Issuers. Only 37% was originated and securitized by the same company. Of those loans that exchanged hands, 70% were sold by the top 100 sellers, and 20% were sold by the top 2 sellers. The total trade volume from the Top 100 list took a dip in September, with $98 million HECMs originated, sold, and securitized, the lowest total in the last 12 months. August was the high water mark, with over $178 million HECMs originated, sold, and securitized.