Reverse mortgages continue to be one of the few areas of growth within the mortgage industry, according to the National Reverse Mortgage Lenders Association (NRMLA). Data provided by the Department of Housing & Urban Development (HUD) shows that 112,100 Home Equity Conversion Mortgages were closed in fiscal year (FY) 2008, which ended Sept. 30, surpassing the record loan volume for FY 2007.
This current loan volume continues a steady uptrend for the industry each year since 2001. Most recently, loan production has grown from 43,131 in FY 2005 to 76,351 in FY 2006, before climbing to 107,558 in FY 2007.
The Homeownership and Economic Recovery Act of 2008 may have dampened growth temporarily, as it is likely many prospective borrowers have been waiting for HUD to implement new provisions that, among other things, will allow borrowers to receive a higher benefit and pay a lower origination fee.
‘Reverse mortgages are really one of the only positive stories in financial services this year, because they provide a safe, proven solution to many Americans' retirement funding needs, especially during the current financial crisis,’ says Peter Bell, president of the NRMLA. ‘We expect the growth of reverse mortgages to accelerate as seniors look for additional sources of income and because the new provisions of the Homeownership Act of 2008 broaden the market for reverse mortgages while making them more attractive.’
SOURCE: NRMLA