New HECM Leader Emerges in Thriving Reverse Mortgage Market!

In an exciting shake-up within the world of home equity conversion mortgages (HECMs), a new champion has emerged! As interest in this sector grows amidst a wave of innovative proprietary offerings, Mutual of Omaha Mortgage has claimed the top spot in HECM endorsements, eclipsing Finance of America Reverse, who held the crown at the end of 2023.

Mutual of Omaha proudly announced a total of 6,149 Federal Housing Administration-backed reverse mortgages in 2024—slightly down from last year’s 6,240. These insights come from an illuminating report by Reverse Market Insight.

On the flip side, Finance of America faced a significant decline, with their volume plummeting by over a third—33.8%—dropping to 5,946 last year from 8,981 in 2023. This shift happened following their acquisition of the long-standing industry leader, American Advisors Group (AAG).

Despite this transition, the merger of two powerhouse lenders has not halted the shift in the rankings. AAG consistently ranked at the top in previous years, with Finance of America always a formidable player among the top five.

Finance of America’s downturn comes as they concentrate on consolidating AAG’s assets early in 2024, a strategic move that involves streamlining their origination systems and launching a revamped marketing approach.

Interestingly, this decline in HECMs might also mirror Finance of America’s shift towards promoting proprietary products—a strategy they aimed to prioritize at the tail end of 2023.

When it comes to market share, Mutual of Omaha dominated with 22.9% of 2024’s volume, closely followed by Finance of America at 22.2%. Rounding out the field were Longbridge Financial, Liberty Reverse, and Fairway Independent Mortgage, holding 12.3%, 4.2%, and 4%, respectively.

The overall decrease in HECM volumes among leading lenders aligns with trends across the board, as the industry recorded a total of 26,834 endorsements in 2024—a 12.2% drop from the prior year’s 30,550 endorsements.

This past year has been a mixed bag for many, according to Reverse Market Insight. While more lenders are channeling resources into their reverse mortgage divisions, 2024 concluded on a less-than-ideal note, primarily due to the steadily rising interest rates.

Interestingly, the National Reverse Mortgage Lenders Association estimates that the tappable home equity for homeowners aged 62 and older surged to a staggering $14 trillion in the second quarter of last year. This rising tide of available equity, juxtaposed with mortgage rates that have more than doubled since early 2022, signifies a wealth of opportunities for reverse loans and alternative liens that allow homeowners to draw on their accumulated wealth.

Nonetheless, the climbing rates have dampened enthusiasm for the federally backed home equity products, with RMI stating, “Going forward, these volumes will be swimming upstream as long as rates continue to soar.”

However, these rate challenges may drive borrowers towards proprietary second-lien solutions that have emerged over the past couple of years as viable alternatives.

Despite the turbulence, the year wrapped up with increased endorsement volumes, primarily fueled by activities from the preceding months before the interest rates surged. December witnessed a notable uptick, with endorsements reaching 2,626 across the industry—a 9.1% increase from November!

In a dramatic finish, the Southeast/Caribbean region wrapped up 2024 with a bang, adding 724 new HECM endorsements—the highest monthly figure for any region in the last year, showcasing a remarkable 42% increase from November.

Meanwhile, the FHA-designated Pacific/Hawaii region saw a slight dip, with 608 loans endorsed in December—a minor 3.2% decrease from November’s 628 endorsements. Notably, six out of ten government geographic divisions experienced an increase in volume as 2024 drew to a close.