July HECM Endorsements Decline; HMBS Issuance Stays Low

Home Equity Conversion Mortgage (HECM) endorsements saw a decline in July, following a brief increase in June, with Home Equity Conversion Mortgage-Backed Securities (HMBS) issuance remaining near its lowest point since 2009. Data released by New View Advisors on Monday indicated that the top 15 HECM originators collectively endorsed 2,034 loans in July, a decrease from the 2,064 loans endorsed in June. Finance of America (FOA) emerged as the leading originator for July, with 498 HECM endorsements. Mutual of Omaha Mortgage followed with 377 endorsements, and Longbridge Financial secured the third position with 351 endorsements. Traditional Mortgage Acceptance Corp. (TMAC) ranked fourth with 101 endorsements, and Guild Mortgage was fifth with 66 endorsements. Analyzing the year ending in July 2026, Mutual of Omaha holds the top spot with 5,189 endorsements, representing a 21% market share. FOA is in second place with 4,822 endorsements, accounting for a 19.5% market share, while Longbridge is third with 4,162 endorsements, holding a 16.8% market share. New View's report, which compiles HECM production data from the Department of Housing and Urban Development (HUD), also examined regional performance. The HUD homeownership center in Santa Ana, California, led in July with 660 endorsements, with its field offices in Santa Ana, Los Angeles, and Seattle showing the highest individual production. Other HUD homeownership centers showed comparable July production figures: Atlanta recorded 467 endorsements, Philadelphia had 466, and Denver reported 441. The current subdued HECM production occurs despite a market environment characterized by higher interest rates, which would typically incentivize more borrowers to consider federally insured reverse mortgages. However, the reverse mortgage market's overall growth is currently being driven by proprietary products. These alternative products often feature higher interest rates but offer distinct advantages, including larger loan amounts and the absence of upfront mortgage insurance premiums. Furthermore, proprietary options can eliminate the requirement for a second appraisal, a process that has presented challenges for some HECM transactions. John Luddy, who oversees reverse mortgage sales for Supreme Lending, provided insights into the prevailing interest rate climate during a recent interview with HousingWire's Reverse Mortgage Daily, highlighting the complex interplay of market conditions and borrower preferences in the current landscape.