Owner: Reverse Mortgage Info URL:http://www.reverse-mortgage-information.org/ Join Date: Wed, 02 May 2007 13:24:04 -0500 Rating:0 Site Description: This blog is dedicated to providing independent information, tips and tools for seniors to get the maximum benefit from their reverse mortgage. Site statistics:Click here
HECM Activity for April 2007 Reported 2007-05-01 20:32:12 HUD today released the HECM reverse mortgage program activity report for April
2007.
After surpassing the 10,000 mark for the first time in March, Home Equity Conversion Mortgage (HECM) endorsements fell sharply in April to 8,041. This represents the first calendar month since July 2005 that HECM endorsements fell below their rolling 12-month average (see graph). It’s not clear if the sharp plunge from the March level is due to inter-month timing issues (Spring Break?) or if it represents a real falloff in HECM activity.
What is clear is that even with the decline, HECM activity in 2007 remains well above 2006 levels: through the first four months of 2007, 37,102 HECMs were endorsed - 49% more than the 24,924 HECM loan loan endorsements in the same eriod in 2006. Total HECM in the most recent 12-month period were 97,817 - 67% higher than the 12-month period ended April 2006.
On a related note, an article at Realty Times note that the reverse mortgage boom is especially impr Read more:Activity
HECM Variations 2007-04-30 22:31:27 HECMs Were Once Equal
A few months ago, the Home Equity Conversion Mortgage (HECM) was a complex, but still plain-vanilla type of reverse mortgage. A HECM was pretty much the same no matter who the lender might be. Today, as reverse mortgage popularity (and lender competition) has exploded, HECMs have evolved into a multi-headed hydra with confusing new features and and an even more confusing array of copyrighted “private label” names.
We thought it would be useful for seniors trying to wade through this marketing jungle to be aware of the key traits that set one type of HECM apart from another.
Is It Really a HECM?
The rising popularity of reverse mortgages hasn’t been limited to HECM’s. Other, non-FHA reverse mortgages have multiplied in recent months as well with tradenames that seem designed to confuse: “CashKeeper”, “Simple Zero Cash Account”, “Generation Plan”, “Independence Plan”, etc., etc. Many of Read more:Variations
Reverse Mortgage Options - A Lender Provides Some Direction 2007-04-18 18:38:06 A few weeks ago we wondered why some lenders were still promoting reverse mortgages carrying a 1.50% margin along side of newer, basically identical HECM products that carried only a 1.00% margin - a much better deal for the borrower. At the same time they promoted lower costs, higher cash availability and other benefits of the new HECM 100 loans, lenders trumpeted the continued availability HECM 150 loans offering “greater options for senior borrowers.”
We even checked with these lenders to see why a senior homeowner would “choose” a HECM 150 instead of a HECM 100 and no could give a rational reason why someone would make this choice.
We were reminded of this today when we saw this post from Next Generation Financial Services, a subsidiary of 1st Mariner Bank directing lenders in the field to “recommend the HECM 100 as the loan of choice to our senior clients.”
We have run extensive scenarios on all three of the monthly ReverseMortgage
programs Read more:Options
, Lender
, Direction
, Reverse Mortgage
Compare Reverse Mortgage Lenders - A New Tool Can Help 2007-04-15 02:54:38 Reverse mortgages are still in their infancy in terms of market size and lender competition. Unlike standard mortgages or home equity loans, you won’t find loan comparisons in the Sunday paper or big online services like Lending Tree serving up multiple reverse mortgage lenders eager to “compete for your business”.
In large part this is because many of the fees and costs associated with reverse mortgages are standardized by federal rules and regulations. For example, on HUD HECM loans, the most common type of reverse mortgage, premiums for mortgage insurance (MIP) and lender origination fees (the two biggest costs) are dictated by federal rules and are pretty much the same across all lenders.
Similarly, interest rates are fairly standard although in recent months lenders have started adjusting their margins - a clear sign that competition is heating up and lenders are finding ways to make their products stand out.
Still, it is worthwhile to comparison shop. In add Read more:Reverse
, Mortgage
, Compare
, Lenders
, New Tool
Time to Consider a New Name for “Reverse” Mortgages? 2007-04-09 22:45:30 ReverseMortgageDaily posted a few days ago about another step backwards for reverse mortgage marketing. This time, a New York Daily News article about rising subprime mortgage foreclosures in New York managed to bring reverse mortgages into a negative light by quoting a City Councilman:
&ldquo
;We need to get the attention of the attorney general and DA’s office,&rdquo
; said City Councilman Leroy Comrie (D-Queens). “A lot of these activities are illegal. We have a high rate of senior citizens and immigrants here, and these lenders are preying on the elderly with reverse mortgages that are really subprime loans.”
Then a few paragraphs later, the “r” word is again used in a not-so-positive vein:
Sen. Chuck Schumer (D-N.Y.), a fierce industry critic, claims subprime lenders routinely targeted many black and Hispanic homebuyers with otherwise good credit histories in a form of “reverse-redlining.” Those borrowers were steered into high-interest loa Read more:Reverse
HECM Activity on East Coast Surging 2007-04-07 04:19:07 HECM reverse mortgage loan data for the first three months of 2007 reveal that east coast markets (particularly those in Florida) are challenging California markets as leaders in HECM reverse mortgage activity. The table below ranks the top 10 Federal Office locations for HECM endorsements in 2006 and shows how these rankings have changed in the first quarter of 2007:
Points worth noting:
Coral Gables (Miami MSA) has surpassed the LA and Santa Ana California offices as the leader in HECM endorsements;
The Tampa Florida office has zoomed from 10th place to fourth place in the rankings;
Of the top 5 Federal Offices for 1Q 2007, two are in Florida and two are in California with the fifth being Boston. In 2006, four of the top five positions were California markets; thus far in 2007, three of the top five spots are east coast offices.
More information on HECM loan activity is available using our HECM Loan Data tool. Read more:Activity
, Coast
, East Coast
HECM Endorsements Surpass 10K in March 2007-04-04 00:51:02 HUD has released its HECM activity report for March
2007 and, for the first time, the number of monthly HECM reverse mortgage endorsements has exceeded the 10,000 mark (10,888, to be exact). For the twelve months ended March 31, 2007, HECM endorsements totalled 96,312 - a 75% increase over the twelve month period ended March 31,2006. On a calendar year basis, the first quarter of 2007 saw 29,061 HECMS endorsed - a 58% increase over 1Q 2006 which saw 18,388 HECM endorsements.
Moreover, as the following chart shows, monthly HECM loan growth continued to steadily outpace its 12-month moving average for a nineteenth consecutive month:
The last time monthly HECM loan growth fell below the 12-month average was July 2005. For more up to date HECM loan activity statistics, visit our HECM Loan Data tool. Read more:Surpass
Top 10 States for HECM Reverse Mortgages 2007-05-03 22:05:36 It’s no secret that the major hot spots for Home Equity Conversion Mortgage (HECM) activity are California and Florida. Both are densely populated states with large senior population segments and (until recently) skyrocketing home values that created lots of home equity wealth for seniors to tap into.
We thought it would be interesting to see what other states were major players in the HECM arena. The following table ranks the top 10 states based on the number of HECM loans endorsed from January 1, 2003 through April 30, 2007 by Federal HUD Offices located within each state.
As would be expected, the larger more populous states dominate this list. Still, there are surprises.
For example, Michigan and Ohio, which according to the Office of Federal Housing Enterprise Oversight (OFHEO) ranked 49th and 50th in housing value growth for the 5-year period ended March 31, 2007 rank 5th and 6th (respectively) in terms of HECM endorsements. (By way of comparison, Florida and Califor Read more:States
, Reverse
HPI - House Price Index 2007-05-06 16:31:33 The HPI (House
Price Index
) is a measure of the movement of single-family house prices prepared quarterly by the Office of Federal Housing Enterprise Oversight (OFHEO). Because of the breadth of the sample, it provides more information than is available in other house price indexes. It is a measure designed to capture changes in the value of single-family homes in the U.S. as a whole, in various regions of the country, and in the individual states and the District of Columbia. The HPI is published by the Office of Federal Housing Enterprise Oversight (OFHEO) using data provided by Fannie Mae and Freddie Mac. OFHEO began publishing the HPI in the fourth quarter of 1995.
The HPI is published every three months, approximately two months after the end of the previous quarter. For more information visit this HPI FAQ page. Read more:House Price
HUD Study Provides Insights About HECM Borrowers 2007-05-11 18:44:11 A new study recently released by HUD’s Office of Policy Development and Research sheds light on the characteristics of HECM borrowers and shows how the “typical” borrower has changed in recent years as the HECM program has matured:
Changes in the Typical HECM Borrower
Characteristic:
2000 HUD Report
FY 2006 HECM Loans
Median Age
75
74
Single Females
56%
44%
Single Males
14%
17%
Couples
30%
39%
Median Value of Property
$107,000
$289,000
Initial Principal Limit (Max. That Can Be Borrowed)
$54,890
$159,000
Single females homeowners are still the dominant HECM borrower group, but single males and, especially, couples are an expanding presence in the market. “Couples”, incidentally refers not just to married couples; as used here the term applies to all HECM loans with two co-borrowers, irrespective of gender.
The purpose of the report is to provide data on HECM loans that will “enhance the development of an efficient secondary market f Read more:Study
, Insights
, Borrowers
Borrowers Should Consider Face to Face HECM Counseling Their Right 2007-05-10 17:24:36 As reported by Reverse Mortgage Daily, HUD recently issued Mortgagee Letter 2007-08 basically eliminating the requirement for potential borrowers to have a face-to-face counseling session prior to getting a HECM reverse mortgage:
FHA will now allow prospective HECM borrowers the option to meet face-to-face with the lender and/or HECM counselor or to participate in loan origination and counseling activities by telephone….Prior to this change, HUD HECM loan origination procedures, (required) that prospective HECM borrowers must make every effort to meet face-to-face with either a housing counseling agency approved to provide HECM counseling or a mortgage lender approved to originate HECM loans.
In the letter, HUD states its policy change was motivated by the fact that face-to-face counseling can be “a hardship for some prospective HECM borrowers, particularly those living in rural areas or with limited mobility.” We suspect, too, that the surge in HECM applications in Read more:Borrowers
, Counseling
, Right
Monthly HECM Activity Nears 11,000 Mark 2008-03-03 12:03:38 Home Equity Conversion Mortgage (HECM) figures released by HUD show that 10,913 HECMs originated during February 2008 - making this the highest monthly production on record. The previous record month was March 2007 when 10,888 HECMs were recorded.
More important than the record, however, is the fact that February was the second consecutive strong month [...] Read more:Monthly
, Activity
January HECM Activity Rebounds 2008-02-03 08:17:31 Rebounding from four consecutive months of below average performance, the number of HECM reverse mortgages originated rebounded in January
posting the fourth best monthly performance on record. The 9,957 HECM’s approved in January represented a 24% increase over the 8,007 HECMs endorsed in the prior month (December 2007) and a 13% jump over the [...] Read more:Activity
, Rebounds
203b Loan Limits Remain Largely Unchanged 2008-01-24 09:55:54 At the start of each year, HUD/FHA does a comprehensive update to the single-family mortgage limits that set the maximum amounts that can be loaned under the HECM reverse mortgage program. In 2007, 203b limits were,for the most part, left unchanged and this is again the case for 2008. Only 151 of 326 limits [...] Read more:Limits
Top 10 Reasons People Get a Reverse Mortgage 2008-01-08 08:22:15 AARP recently released one of the most comprehensive reports to date on the state of the reverse mortgage industry. The report (ReverseMortgage
s: Niche Product of Mainstream Solution?) includes a wealth of information about consumer attitudes and experiences with reverse mortgages.
One of the more interesting presentations in the report is the listing of the [...] Read more:Reasons
, Reverse Mortgage
2007 HECM Numbers 2008-01-02 16:23:29 HUD has reported Home Equity Conversion Mortgage (HECM) endorsements for December 2007 and, as the chart below shows, growth continues to slow markedly from the first months of 2007.
Key Points:
8,007 HECM loans were endorsed in December 2007, a 3% decline from the 8,270 endorsements in the prior month (November 2007) and just a modest [...] Read more:Numbers
Reverse Mortgages Under Senate Scrutiny 2007-12-20 13:16:41 Recently, the United State Senate
Special Committee on Aging held hearings on the problems and opportunities surrounding the rapid growth in reverse mortgages (Reverse
Mortgages: Polishing Not Tarnishing The Golden Years). The testimony of witnesses is loaded with some compelling insights (good and bad) and is highly suggested reading for those considering a reverse [...]
November HECM Activity Disappoints 2007-12-03 15:41:09 8,270 HECM reverse mortgages were endorsed during November
2007 according to the most recent HECM activity report released by HUD. November’s HECM production is a 10.6% gain over the 7,478 HECM’s endorsed in November 2006 but a 1.7% decrease from October 2007 when 8,417 HECMs were endorsed. More troubling: November was the third [...] Read more:Activity
Index Highlights Best (and Worst) Areas For Reverse Mortgages 2007-12-03 07:42:32 The days of borrowing against ever-rising home equity and having home price appreciation cancel out the pain of loan interest costs appear to be over. Reverse
mortgages are often described as “rising debt, falling equity loans”. Yet, for several years reverse mortgage borrowers in many parts of the country have enjoyed a “rising debt, [...] Read more:Index
, Highlights
Reverse Mortgages and Subprimes - Are there Parallels? 2007-11-28 10:19:51 As the reverse mortgage industry expands and constantly introduces new (and confusing) products, some people are beginning to wonder whether reverse mortgages are destined to become the next subprime mess.
The same type of financial engineering and securitization that repackaged regular mortgages (once held by local banks) into exotic investment securities sold around the world is [...] Read more:Reverse
, Parallels
HECM or HELOC? A Tool to Help You Decide 2007-11-12 09:17:49 In a previous post we noted an important fact largely ignored in the plethora of recent books and articles on reverse mortgages: the majority of reverse mortgages (at least HECM reverse mortgages) terminate within seven years of their origination. For many of these borrowers, a standard home equity line of credit loan (HELOC) might [...]
HECM Mortgage Payoff Types by Borrower Age 2007-11-09 08:39:10 We came across this table that was part of a presentation at the Mortgage
Banker’s Association 94th Annual Convention. The table shows, by borrower age, the cause for HECM reverse mortgage loan payoffs.
We’ve previously written about the surprising fact that the majority of HECM loans are paid off within seven years. [...] Read more:Payoff
, Borrower
HECM Lender Comparison 10/31/2007 vs 10/31/2006 2007-11-07 15:13:05 In a prior post we examined evolution of the HECM market over the past two years (ended 10/31/06 and 10/31/07) focusing on the geographic location of HUD home equity conversion mortgage endorsements. The table below examines the evolution of lenders’ HECM market shares and growth over the same time frame.
Some observations:
Market share among the [...] Read more:Lender
HECM Market Comparison 10/31/2007 vs 10/31/2006 2007-11-06 07:28:28 Much has changed over the past year in the HECM loan market: Florida has taken over from California as the reverse mortgage activity “hot spot” in the U.S.; new products like the HECM 100 and HECM 125 have emerged, and the overall volume of HECM loans has increased substantially. We thought it would be interesting [...] Read more:Market
HECM Growth By State 2007-11-02 05:54:55 Our prior use of a “heat map” showing Home Equity Conversion Mortgage Growth
in U.S. State
s was well received by visitors so we thought we’d make it a monthly feature using data from HUD’s monthly HECM activity reports.
The map below is based on percentage changes HECM growth rates for the 12-month period ended 10/31/07 compared [...]
HECM Activity Shows Moderate Rebound But Still Disappoints 2007-11-01 13:10:36 October HECM activity rebounded somewhat from the sharp falloff seen in September, but remained well below the 12-month average. According to HECM MIC reports recently issued by HUD, 8,417 HECMs were endorsed in October, a 9% increase from September’s total of 7,695. But the October total fell about 6 percent under the 12-month [...] Read more:Activity
, Moderate
, Rebound
Tips For Avoiding Reverse Mortgage Scams 2007-10-28 17:16:02 We came across a truly useful book the other day: Scam Proof Your Life (377 Smart Ways to Protect You & your Family From Ripoffs, Bogus Deals & Other Consumer Headaches). The book is written by Sid Kirchheimer, “AARP’S Scam Alert Expert” and contains a wealth of practical tips and advice to use [...] Read more:Reverse
, Mortgage
Interesting Info About Financial Freedom Reverse Mortgage Operations 2007-10-26 13:46:38 We came across a recent press release that included a few interesting tidbits about the FinancialFreedom
reverse mortgage operations, the recognized industry leader (at least in terms of loan volume):
As of June 30, 2007, Financial Freedom serviced a portfolio of 131,315 loans with an outstanding principal balance of nearly $16 billion, representing a 41% [...] Read more:Reverse
, Mortgage
Crucial Reverse Mortgage Facts No Is Telling You About 2007-10-17 19:52:01 Recently, we’ve spent time catching up on some reading. There have been a number of good articles on reverse mortgages published recently by respected sources like Kiplinger and others. A new book on reverse mortgages (The Complete Guide to ReverseMortgage
s), has also hit bookstores within the last couple of months and we’re [...] Read more:Crucial
, Telling
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