September Sees Large Jump in HECM Applications, As Expected

We knew that reverse mortgage applications were likely to jump to new levels in September, but we did not know how much- until now. September’s FHA Outlook report shows a 72.4% increase in HECM applications in September versus August. 19,055 HECM applications were submitted in September, versus 11,051 in August.

Therefore, while only 9,473 reverse mortgages were endorsed by the FHA in September, up from 8,933 in August, the number appears poised to climb in October and November, as those who applied before the principle limit factors fell 10% on October 1st complete their applications. It is also interesting to note that the number of purchases and refinances made up a very small percentage of the reverse mortgages endorsed, with 137 HECMs for Purchase and 790 HECM Refinances endorsed in September.

Finally, as the fiscal year ended, it is good to see that the FHA’s predictions were fairly in line with the actual results. 162,619 HECM applications were filed, as opposed to the 165,000 projected in FY 2009. Of those, 114,691 HECMs were endorsed in FY 2009. This is an increase of 2.3% from last year, though still below the projected 119,700 endorsements. Nonetheless, it appears that the reverse mortgage industry grew in FY 2009, despite the recession, and appears poised for a strong beginning to FY 2010.

This Week's Reverse Mortgage Rates: October 27, 2009

This week’s reverse mortgage rates are below. These rates are effective for the week beginning October 27, 2009.

APR:

HECM LIBOR 225: 2.494

HECM LIBOR 250: 2.744

HECM LIBOR 275: 2.994

HECM LIBOR 300: 3.244

Expected Rates:

HECM LIBOR 225: 5.83

HECM LIBOR 250: 6.08

HECM LIBOR 275: 6.33

HECM LIBOR 300: 6.58

The HECM LIBOR APR remained almost unchanged for the fifth consecutive week. Meanwhile, the expected rates continued to rise, though they only rose by three hundredths of a point. One wonders when the APR will finally change, and, when it does, in which direction it will go.

This Week's Reverse Mortgage Rates: October 20, 2009

This week’s reverse mortgage rates are below. These rates are effective for the week beginning October 20, 2009.

APR:

HECM LIBOR 225: 2.495

HECM LIBOR 250: 2.745

HECM LIBOR 275: 2.995

HECM LIBOR 300: 3.245

Expected Rates:

HECM LIBOR 225: 5.89

HECM LIBOR 250: 6.05

HECM LIBOR 275: 6.30

HECM LIBOR 300: 6.55

The HECM LIBOR APR remained almost unchanged for the fourth consecutive week. However, expected rates rose significantly. The expected rates are up .15 this week. One hopes this is not the beginning of an upward trend. After a short week last week, these rates will be good for a full seven days.

This Week's Reverse Mortgage Rates: October 14, 2009

This week’s reverse mortgage rates are below. These rates are effective for the week beginning October 14, 2009.

NOTE: The rates initially published on October 13th were incorrect by 1 thousandth of a point. Please consult the rates below moving forward.

APR:

HECM LIBOR 225: 2.495

HECM LIBOR 250: 2.745

HECM LIBOR 275: 2.995

HECM LIBOR 300: 3.245

Expected Rates:

HECM LIBOR 225: 5.65

HECM LIBOR 250: 5.90

HECM LIBOR 275: 6.15

HECM LIBOR 300: 6.40

The HECM LIBOR APR remained almost unchanged for the third consecutive week. The expected rate only decreased by one hundredth of a point. Due to the Columbus Day Holiday, these rates will only be in effect from October 14th to October 19th.

This Week's Reverse Mortgage Rates: October 6, 2009

This week’s reverse mortgage rates are below. These rates are effective for the week beginning October 6, 2009.

APR:

HECM LIBOR 225: 2.494

HECM LIBOR 250: 2.744

HECM LIBOR 275: 2.994

HECM LIBOR 300: 3.244

Expected Rates:

HECM LIBOR 225: 5.66

HECM LIBOR 250: 5.91

HECM LIBOR 275: 6.16

HECM LIBOR 300: 6.41

While the HECM LIBOR APR remained constant this week, the expected rate declined considerably, dropping two tenths of a point. Borrowers should see savings from such an interest rate decline, and hopefully the low rates will continue. This is the first full week that the new PLF limits will be in effect.