The origination of federally insured reverse mortgages lingered last month near the lowest level in at least six years as the loss of biggest players in the sector continued to cut into production.
During October, 3,745 home-equity conversion mortgages were endorsed by the Federal Housing Administration.
That was just 39 more units than in September — when volume fell to the lowest level on record based on the oldest available data from as far back as April 2008.
HECM endorsements have plunged from October 2011, when Reverse Market Insight reported that originations totaled 4,653 reverse mortgages.
The decline in HECM production follows the exit of the sector’s biggest players over the past two years. Among the recently departed are Bank of America Home Loans, Financial Freedom, MetLife Bank, SunTrust Mortgage Inc. and Wells Fargo Home Mortgage.
So far during 2012, FHA has insured 44,644 reverse mortgages.
Last month’s biggest HECM originator was Security One Lending, which generated 636 in reverse mortgage endorsements. Security One’s production leapt from 264 loans in September.
No. 2 American Advisors Group pushed HECM endorsements up to 470 units from the prior month’s 410.
Genworth Financial Home Equity Access Inc. came in third with 270 HECM endorsements, falling from 443 in September. Ocwen Financial Corp. disclosed in a Securities and Exchange Commission filing this week that it reached an agreement to acquire the reverse mortgage lender from parent Genworth Financial Corp. in a transaction that is expected to close during the first-quarter 2013.
Rounding out October’s top five were One Reverse Mortgage LLC, which closed 261 HECMs in October, and Urban Financial Group, where volume totaled 160 loans.
Just 549 HECM originators were active last month, plunging from 1,293 active firms a year earlier.
