Reverse Mortgage Volume Grows 25% to $30.2 Billion in 2009

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 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.  Whether or not the industry will continue to grow in FY 2010 is another story. The Office of Management and Budget is predicting the industry will endorse 120,429 units in 2010 while FHA’s Outlook Report shows a prediction of 106,875 units for FY 2010.