HECM Endorsement Analytics – December 2019

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.

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