The Shopper Monetary Safety Bureau (CFPB) in December launched its 2023 Mortgage Market Exercise and Tendencies report, which included a quick take a look at exercise from the reverse mortgage trade based mostly on Residence Mortgage Disclosure Act (HMDA) knowledge from 2023.
Whereas the vast majority of the info largely excluded reverse mortgages from tendencies within the broader mortgage market, the report did embrace a bit devoted to the origination of Residence Fairness Conversion Mortgages (HECMs). This part didn’t account for proprietary, private-label reverse mortgages, that are an more and more frequent avenue for the trade regardless of the HECM product’s continued dominance.
“HMDA knowledge are used to help in figuring out whether or not monetary establishments are serving the housing credit score wants of their native communities; facilitate public entities’ distribution of funds to native communities to draw personal funding; and assist establish attainable discriminatory lending patterns and implement antidiscrimination statutes,” the report defined.
The report additionally additional particulars a standard actuality in that the highest 10 trade lenders make up the overwhelming majority of reverse mortgage originations within the U.S.
“In whole, the highest 10 reverse mortgage lenders accounted for near 22,000 reverse mortgage originations, or roughly 88.6%, of all reverse mortgage originations reported beneath HMDA in 2023,” the report famous.
The rankings are largely in step with these noticed by Reverse Market Perception (RMI) initially of 2024, though there are some anticipated variations in whole origination volumes given the reporting necessities and the endorsement knowledge obtainable at the moment.
Among the many main lenders, the corporate now branded as Finance of America (FOA) — which nonetheless operated as Finance of America Reverse (FAR) for the whole lot of 2023 — was the biggest reverse mortgage lender that reported HMDA knowledge in 2023. It accounted for roughly 30.6% of all reverse mortgage originations reported beneath the rules.
However this additionally consists of originations that seemingly started beneath former trade chief American Advisors Group (AAG), which was acquired by FOA in 2023. Final yr, the corporate introduced that each FAR and AAG — which had been working because the lender’s direct-to-consumer division following the closure of the deal — can be unified beneath the FOA model.
Mutual of Omaha Mortgage was No. 2 behind FAR with a market share of twenty-two.5%, adopted by Longbridge Monetary with 12.8%. One yr later, Mutual of Omaha would overtake FOA/FAR on the leaderboard to develop into the main HECM lender within the area, in accordance with endorsement knowledge from RMI.
The report famous that not like the ahead mortgage trade, “the values for applicant revenue of reverse mortgages within the HMDA knowledge are largely ‘not relevant’ and we excluded the ‘lender mortgage insurance coverage’” borrower knowledge from its reverse mortgage origination tabulation within the report.