According to the FHA’s Outlook report, HUD expects 210,000 reverse mortgages to be issued between October 2008 and September 2009 (FY 2009). That represents a roughly 90% increase in reverse mortgages versus FY 2008.
That would be well and good if it weren’t for the fact that recent data suggests the opposite of HUD’s projections.
Let’s take a look at monthly volumes. To reach the projection of 210,000 reverse mortgages, the industry would have to average 17,500 reverse mortgages per month. In October and November, the final tallies were 10,121 and 7,771, respectively. That means it took the industry 2 months to produce what HUD projected would happen in 1 month.
Combined with projected further declines in property values, I think most industry participants will be happy if 2009 turns out to just be even with 2008, let alone a 90% increase.
Can anyone shed light on why HUD has such a rosy view for 2009?
The original report is here: Outlook Report