December sees decline in reverse mortgage volume and securities issuance.

Reverse mortgage endorsement volume and securities issuance experienced a decline in December 2023 as performance metrics continue to fall, but industry consolidation may shape the business in 2024. According to Reverse Market Insight, HECM endorsement volume fell by 3% in December and while not a substantial drop, this reportedly didn’t come as a surprise. A variety of factors were cited for this decline, including interest rates, rates and refinancing difficulties, and difficulties in qualifying new borrowers. Furthermore, securities issuance, in the form of HMBS issuance, also fell in December to $457m, a sharp decline from $561m in November. Nevertheless, the overall issuance figure for the year was in line with expectations. Looking ahead, origination volume is expected to increase if home values remain stable and the 10-year treasury stays below 4%. Additionally, the increased maximum claim amount for 2024 should also help to increase origination performance. “Issuers are taking advantage of Ginnie Mae’s provision to issue pools as small as $250,000,” reports New View Advisors, which allows for the securitization of multiple participations related to a particular HECM in any one issuance month. Finally, the exit of Open Mortgage from the reverse mortgage industry and the impacts of Reverse Mortgage Funding’s bankruptcy could also have some impact on the business and its performance metrics.