The volume and value of reverse mortgages, also known as Home Equity Conversion Mortgages (HECM), dipped in the first quarter of 2019. The figures were released by the U.S. Department of Housing and Urban Development’s Federal Housing Administration Single-Family Mutual Mortgage Insurance (MMI) Fund Programs Quarterly Report to Congress.
Reverse Mortgage Daily reports the total volume of reverse mortgages dropped by 18.19 percent from the previous quarter to $2.48 billion, while HECM endorsement counts the first quarter of 2019 declined 17.67 percent from last quarter to 7,388 loans.
Part of the lower numbers has to do with the government shutdown that took place at the beginning of the year. It paralyzed new reverse mortgage activity at the beginning of the year, according to Reverse Mortgage Daily, which added, “It is as yet unclear if the endorsement and volume figures have cleared the distortive effects of the shutdown.”
The HUD report also featured an adjustment to the way the HECM program’s numbers are reported. The story said, HUD has discontinued the reporting of maximum claim amount and replaced with the actual HECM Claim paid amounts as we believe this is more indicative of actual claim costs. Total HECM program claims increased this quarter by 47.36 percent from 16,095 loans to 23,718 loans due to higher number of assigned claims to HUD.