Reverse Mortgages Power FHA Return

While the FHA is having a good year with applications up 10.9 percent so far in the fiscal year (the year beginning October 1st), it’s strongest product is plainly the home equity conversion mortgage (HECM), what most humans call a reverse mortgage.

Figures from the FHA show that 4,642 HECMs were issued during the first 15 days of July. Also, HECM originations are up 46.1 percent for the year.

In effect, 21.6 percent of all FHA loans issued in the first half of July were reverse mortgage products.

At this rate is looks as though the FHA will insure some 85,000 reverse mortgages this year — up from 76,351 last year.

What does it mean?

First, without the reverse mortgage product, the FHA would have another declining year.

Second, HECMs are the biggest reverse mortgage product out there.

Third, in the context of millions of mortgages issued each year, the reverse mortgage remains a niche product — for now.

This entry was posted on Monday, August 6th, 2007 at 3:26 am and is filed under Reverse Mortgage . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.