FOA leads July HECM endorsements; HMBS issuance remains weak

Finance of America (FOA) was the leading endorser of Home Equity Conversion Mortgages (HECMs) in July. However, overall Home Equity Conversion Mortgage Mortgage-Backed Securities (HMBS) issuance continues to be weak, remaining near 14-year lows. HECM production is muted, even with higher interest rates, and proprietary products are currently driving industry growth.

John Luddy, senior vice president of reverse lending at Supreme Lending, offers a contrasting perspective, stating that the reverse mortgage market is in its strongest position to date. He attributes this strength to several factors, including high home values, an expansion of product options available in the market, and growing demand from older homeowners. Luddy also highlighted the critical need for increased knowledge development among loan officers to ensure success within the reverse mortgage sector.

The current market conditions for HECM endorsements show a concentration of activity with FOA taking the lead, while the broader HMBS issuance indicates a general slowdown in the sector. This suggests a market where specific companies or product types are performing better than the overall industry average. The commentary from Supreme Lending points to underlying positive economic factors like home equity and a demographic shift towards increased demand from seniors, which could support future growth if market participants are adequately prepared.