“People who don’t give up attract other people’s attention.” As do people whose humor is stuck in 4th grade – like mine usually is. For example.

Reverse Mortgages - Attracting Forward Lenders

Given that 10,000 people a day are turning 62 (the minimum age to take out a reverse mortgage), plenty of "forward" lenders are looking at the channel, or are fostering divisions to capture the business & revenue. Reverse mortgages are a "costly blessing" to older people who have valuable homes, but not a lot of ready money. They allow people to borrow money to spend now, that only must be repaid (plus interest) when they, or their estate, finally sells their home. Real estate agents and financial planners are often offered help by lenders doing reverse mortgages: "We can help your clients navigate the tricky reverse mortgage waters. We know there is a lot of old information out there - let us help your clients learn the truth about what an HECM is and isn't."

A reverse mortgage loan is available to homeowners age 62 or older and allows the homeowner to borrow the equity in their home minus fees and costs. It may only be secured by a primary residence for which all title holders are borrowers and are age 62 or over. To be eligible, borrowers must receive reverse mortgage counseling explaining the fees, costs, and ramifications of getting a reverse mortgage. Reverse mortgage payouts can be in the form of a line of credit or lump sum, with limits on the size of the lump sum payout.

June 15 was World Elder Abuse Awareness Day (WEAAD), and the National Reverse Mortgage Lenders Association and the National Aging in Place Council launched new consumer webpages to "help older adults, and their loved ones, recognize the signs of abuse and report instances of financial fraud and exploitation to the appropriate authorities. Through their combined audience of more than 36,000 monthly website visitors, the organizations hope to provide more seniors with the tools to protect themselves from scams and abuse." Visit Recognize and Report Elder Financial Abuse on NRMLA's consumer education website at www.reversemortgage.org.

The Las Vegas Sun recently had an article about the pros and cons of reverse mortgages. Even the Huffington Post is telling consumers how to shop for a reverse mortgage.

Total new HMBS production issuance dropped from $584MM in April to $543MM in May, but as an industry, we continue to perform about 20% better year over year in total. The $543MM of new prod created in May is roughly 121% of UPB issued in same month 2016. This improvement is down slightly from the 127% improvement YoY we clocked in April. Four of the top five issuers saw a fall in issuance in May. For the 28th consecutive month, AAG leads all industry participants in new production issuance. In May, total new production issuance slipped to $128MM, good for 23.6% market share, down a bit from $159MM and 27% market share in April.

The #2 spot goes to FAR as the only top 5 issuer to show an increase in issuance month over month. Market share increased from 16.2% to 20.5% as issuance levels look consistent and strong across all 3 HECM rate varieties. RMF ranked third in May as total new issuances declined by ~$2MM to $101MM month over month. Ocwen was fourth with $98.7MM in new production pools. Ocwen remains the 2nd largest issuer of fixed-rate paper, finishing just $2MM shy of AAG for the fixed rate crown. In 5th place, LiveWell issued $50MM in May vs $59MM in Apr, as the firm saw market share fall slightly from 10.2% to 9.2%.  As always, fully interactive charts are on our site available here.

George Brooks with IMF reports that lenders originated $4.5 billion of new home equity conversion mortgages in the first quarter in his story, "Reverse Mortgage Lending on the Rise Again, but..." "Compared to the same period a year earlier, production increased by 16.6 percent. Purchase reverse mortgages comprised 83.6 percent of HECMs produced during the period. Borrowers appeared to favor reverse mortgages with adjustable rates over fixed-rate HECMs, which accounted for only 10.7 percent of HECMs in the first quarter. Despite increased originations in the first quarter, FHA data show a gradual decline in HECM endorsements since peaking in FY 2009 with $114.7 billion. For the full story and an exclusive look at the nation's top 100 reverse lenders, see the new edition of Inside FHA/VA Lending, now available online."

How much so you really understand about a HECM Reverse Mortgage? One advantage is that it does not impose a monthly payment burden on the borrower. The disadvantage is that the reverse mortgage will cover only about 50-60% of the house price, depending on the borrower's age, requiring the purchaser to find the remaining needed cash elsewhere. The most common source is asset liquidation. If you know anyone considering or that should consider this program, This HUFFPOST article will help give you some insight.

Recognizing the significant improvements that have been made to the HECM program that reduce risk to the MMI Fund and ensure responsible lending to aging homeowners, President Trump published a proposed Fiscal Year 2018 budget that would permanently remove the cap on the aggregate number of reverse mortgages that FHA can insure. Click here to read the full article.

There is training. For example, Plaza offers a presentation designed to help financial planners and loan professionals to better understand how Plaza's Reverse Mortgage can be used as a vital part of an overall retirement strategy and not just a loan of last resort.

The lending sector certainly receives its share of "bad actors" which the press highlights. For example, recent headlines blared, "Chicago man accused of stealing $10M in reverse mortgage scheme." "The Federal Trade Commission filed a civil suit against him in 2003. The Illinois Department of Financial and Professional Regulation suspended his loan originator registration in 2010. But it took until Mark Steven Diamond - who also went by the name Mark Stevens - was accused of stealing a total of $10 million of equity in the homes of at least 122 elderly victims before he was arrested on Monday and, on Tuesday, upon appearing in federal court, was charged with wire fraud and engaging in a financial scheme, according to FBI Special Agent Garrett Croon, a media coordinator for Chicago." The oldest victim was 98.

"Mark Diamond caused certain elderly homeowners to execute reverse mortgage loan documents, despite the fact that they were disabled or otherwise unable to understand the reverse mortgage loan documents," said Kelly Popovits, a special agent with the United States Department of HUD, Office of Inspector General. Diamond, 60 and of Chicago, is suspected of working with at least five co-conspirators, officials said, defrauding seniors by fraudulently obtaining home loans in their names and keeping the profits..."

Jobs, LO Products and Surveys

Over the last three years, the U.S. Department of Veterans Affairs has seen a steady increase in veterans and active-duty military accessing home loans. In a recent article, loanDepot mentioned that while the national average growth of VA loans has grown by 61%, its VA loan business has grown almost three times faster than the national average for other lenders. Last year alone, loanDepot helped more than 23,000 military families secure nearly $7 billion through VA loan financing, increasing their number of funded VA-guaranteed home loans by 170% and the total funded volume of their VA home loans by nearly 225% since 2014. Further demonstrating their dedication to serving our Veterans, loanDepot was the first company to offer an official and comprehensive VA Renovation program. If you are interested in learning more, or interested in joining #TeamloanDepot, please contact Cassidy O'Sullivan.

Pacific Union Financial, LLC is focused on growing its Distributed Retail division and its Northeast region has gained another new retail branch in Rocky Hill, Connecticut. Branch Manager, Mike Fiano, comes with over two decades of management experience and a proven track record of building successful origination teams in the Northeast region. If you are a mortgage sales professional in the Northeast region and looking to grow your career with a successful company that offers first-rate tools and support to their sales professions, then contact Catherine Nelson and learn more about Pacific Union.

Assurance Financial, a full-service residential lender, continues to grow! "We're now hiring experienced MLOs for our branch in beautiful Charlotte, NC. What makes Assurance Financial different from other mortgage companies? We close loans on time. Assurance Financial's business model is different. We believe in supporting our LOs first, last, and always. Our operation is built around the branch, and the branch is built around our MLOs. Their success is our success. Assurance is also seeking LOs in CO, AZ, NM, LA, TX, MS, AL, TN, OH, FL, GA, AR, NC, and SC. Find out more from Paul Peters, CMB at 225-239-7948, or visit LendTheWay.com/careers."

Mortgage automation leader Floify is expanding its App Store with the addition of a Credit Plus Credit Report App. This partnership allows LOs to collect credit reports automatically during the 1003 'Apply Now' or on-demand later in the loan file. Borrowers securely authorize and give consent at the time of request directly through their Floify account. This makes the automated process easier, decreases mortgage fraud, and improves the borrower experience. Loan officers and their teams can get a demo to see how Floify automates the credit reporting process.

Download "Profile of Today's New Originator," a nation-wide survey from XINNIX that gives illuminating insight into the next generation of loan officers. Featured in Mortgage Banking Magazine, this resource details who these new originators are, what is bringing them into the industry, and how you should approach recruiting them. Click here to read the article today! For more information on what you can do to empower the new loan officers on your team, check out the XINNIX ORIGINATOR program. Delivered through XINNIX's groundbreaking Learning and Performance Center, ORIGINATOR is the most comprehensive and nationally-acclaimed program for new loan officers entering the mortgage industry. 

Congrats to Scott Houp who Homeward Residential, Inc., a national mortgage lender and subsidiary of Ocwen Financial Corporation, announced is its new Vice President of Sales, Western Division.

Capital Markets

On the short end of the yield curve, where do the Fed Funds futures stand after the FOMC meeting last week? For the upcoming July meeting, a 97% chance of no changes to rates. For the Sep meeting, an 87% chance of no changes, and for December a 54% chance of no moves. And who knows what will happen in the next six months. The flattening of the yield curve yesterday means that the 5-year Treasury yield is within two basis points of a three-week high while the 30-year yield is within one basis point of a seven-month low. Be careful what you wish for: a flattening yield curve is often indicative of a slowing economy.

NY Fed President Dudley expects wages and inflation to pick up and for the Fed to continue to remove policy accommodation, especially as he thought halting it would jeopardize the recovery. Given the lack of news, it seems traders and investors latched onto that, and the 10-year note price worsened .250 and its yield closed at 2.19% while agency MBS prices sold off about .125.

Not much news today (some current account trade figure) although oil prices are dropping significantly, and there are three speakers from the Federal Reserve which may make things interesting. We commence Tuesday with the 10-year yielding 2.17% and agency MBS prices are making up the .125 they lost yesterday.