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M R EP O RT | 49 O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST ORIGINATION HECM Endorsements Falling, But Still High Here's how the reverse mortgage market was faring. A June dip follows a spike last May and still accounted for the second-highest en- dorsement tally in over a year. Total endorsements for home equity conversion mortgages declined by 16.4% during June, according to the newly published HECM Originators report from Reverse Market Insight (RMI). During June, wholesale endorse- ments recorded a 25.5% drop while retail endorsements slid by 8.6%. A total of 4,203 HECM loans were en- dorsed during the month, and RMI observed June's total was the second highest in more than a year. Among the major HECM lend- ers tracked during June, RMI not- ed HighTech Lending Inc. saw its volume spike by 604% to 169 loans, making up for slower activity over the two previous months. Mutual of Omaha Mortgage saw an up- swing of 11% to 272 loans, marking a second consecutive record-high month for the company. Within the realm of the smaller originators, RMI found GoodLife Home Loans recording a 152.9% spike to 43 loans in June, while South River Mortgage, a relatively new entry in the reverse mortgage space, saw its activity swell by 450% to 22 loans while American Financial Mortgage increased 125% to 18 loans. June's relatively mild data results followed a dramatic turn in May when HECM endorsements spiked by 214.8% for a of total 5,027 loans. During May, retail endorsements surged by 235.5% while wholesale levels skyrocketed by 193.4%. "HECM endorsements recovered dramatically in May after HUD and lender operations challenges related to the pandemic con- strained volume in April," stated RMI in announcing the May data. Separately, the Department of Housing and Urban Development's Office of the Inspector General issued a fraud bulletin that warned borrowers against potential schemes related to the reverse mortgage process. The bulletin cited how scammers could at- tempt to pilfer a borrower's Social Security number and force them into entering dubious legal agree- ments, adding that due to the "economic uncertainty caused by the pandemic, HECM borrowers may become targets of schemes de- signed to take advantage of those seeking reverse mortgages." Robust Reverse Mortgage Market Expected Through 2020 Find out what factors are leading to "a steady upward trend in HMBS issuance all year." D ata published by Reverse Mortgage Daily reveals that July's statistics indicate the reverse mortgage market is holding strong. In fact, the market appears to be in better shape than ever before. Specific highlights of the report revealed that according to data procured from Ginnie Mae and other various expert sources, the production of new Home Equity Conversion Mortgage (HECM)- backed securities (HMBS) for July was an impressive $1.42 billion. Reasons for this include the slow but sure recovery of capital markets and consistently low interest rates, both of which are spurring healthy production and an ample seasoned pool. All of these factors culminate in what has now formed the highest issuance level since February 2018. Further revealing the market's strength is the fact that the U.S. Department of Housing and Urban Development (HUD) reported 4,256 HECM endorse- ments during July. This marked an impressive increase from June's 4,209 endorsements, yet failed to reach the apex of May's counts. However, experts have pointed out that May's higher statistics could have been a direct result of a backlog of endorsements resulting from the hubbub caused by the coronavirus pandemic. Also affecting raised levels of HMBS issuance are several larger economic factors, as well as the implementation of new rules implemented by the Federal Housing Administration (FHA) in October 2017—a move that caused reduced activity in the reverse mortgage business. Another highlight pointed out is an increased interest in the reverse mortgage product category. Michael McCully, Partner at New View Advisors, commented on this trend and how it specifically related to the market's current health and vitality: "We have seen a steady upward trend in HMBS issuance all year, and anecdotal evidence of record or near-record applications and new originations from lenders." McCully further noted that this uptick causes him to forecast a hopeful view of the industry's performance from now throughout 2020. He reiterated that although the transition away from the LIBOR index may be a volatile factor, all other signs are overall quite positive.