HECM Endorsement Analytics – August 2019

HUD’s August 2019 HECM Endorsement Summary Report shows a total of 2,341 endorsements, 15% lower than July’s 2,754 units, a summary of which can be found here: NV Endorsement 2019_08. Monthly endorsement volume has been fluctuating around 2,500 units since March of 2019. If the industry maintains this pace next month, we’ll tally only about 31,000 endorsements for fiscal year 2019, substantially lower than FY2018’s 48,359 units and the 55,332 units from FY2017.

Fairway sold 112 of its originations to another sponsor in August. Over the last 12 months Fairway has originated 951 such loans endorsed by HUD, the leader by far in this sub-market. Finance of America Reverse kept its lead in sponsoring loans originated by another lender. Over the last 12 months, FAR has sponsored 3,426 such loans. Liberty Home Equity Solutions and Reverse Mortgage Funding each sponsored more than 2,000 such loans over the last 12 months.

It is well known that American Advisors Group has a commanding lead in HECM endorsements. Over the past 12 months AAG’s overall monthly market share of endorsements has ranged between 23% and 32%. With loan level endorsement data we can dig deeper into the company’s geographic distribution. The following table shows that with the exception of five states and Puerto Rico, AAG has a 20% or greater market share in every state. For comparison, One Reverse Mortgage and Finance of America Reverse, who hold second and third place based on last-12-month endorsement volume, each have an approximate 8% market share nationwide. Interestingly, AAG has a slightly smaller lead in California where there’s the largest number of HECM endorsements, with an 18% market share. AAG’s dominance in the South and Midwest is substantial, with 64%, 62%, 57% and 57% respectively in West Virginia, South Dakota, Kentucky and North Dakota.

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