Volume of the Federal Housing Administration’s reverse mortgage program, the Home Equity Conversion Mortgage (HECM) grew to $30.2 billion in FY 2009 according to budget documents released earlier this week. Despite only a slight increase in units endorsed in FY 2009, max claim volume grew 25% compared to the prior FY total of $24.2 billion. Looking at the calendar year numbers is even more telling, while units were down 2.9% in 2009, the max claim amount and UPB totals were up 26% and 42% respectively from the last year.
According to data from Reverse Market Insight, 22% of the increase in volume comes from the lending limit increase and the remaining 3% stems from the additional units in FY 2009. In addition, the shift to the fixed rate product has also been a factor.
“The shift to the fixed rate product further magnifies the increased dollar volumes spurred by higher lending limits, as the unpaid principal balance (UPB) is up 31% for FY 2009,” said John K. Lunde, President of RM Insight.
Courtesy of Reverse Mortgage Daily