Endorsements of federally backed home-equity conversion mortgages dropped to their lowest level in over six years, even as applications largely held steady in recent months, according to new data from Reverse Market Insight.
In a challenging market, trusted referrals become even more valuable and well worth the effort for originators to utilize.
"My advice would be to continue working referral-based strategies with financial planning communities and tax preparers," said Cliff Auerswald, president of Orange, California-based lender All Reverse Mortgage.
"I love the idea of getting referrals from financial planners. They have a similar interest in preserving their customers' cash."
The pullback in HECMs points to how rapidly obstacles emerged in front of HECM originators in 2026 — many similar to those facing their forward-lending peers — with rising interest rates changing the dynamics of today's market.
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"We're seeing much lower loan-to-values available to these borrowers," Auerswald said. "You also have that other element where you're getting less money, but you have all these hefty amounts of closing costs too, like the insurance. And then you've got the third-party fees."
HECM activity by the numbers
Endorsements declined for the third-straight month, with activity slowing even as borrower interest appeared steady, RMI said. Issued case numbers, which are assigned for new incoming applications, held at approximately 3,000 per month between May and July.
"We were wondering if decent case number issuance might pull the endorsement totals off these lows, and at least last month, it was a resounding 'no,'" RMI said in its latest report.
Among the leading factors causing applications to fall at the wayside is the question of eligibility, according to Auerswald. "We're seeing the highest levels of leads that are short to close, so that they're dead on arrival essentially."
Activity fell in all but one of the 10 regions tracked by RMI. With the lone uptick, the Southwest region saw endorsements rise 16.3% to 192 loans from a "weak" August figure of 165.
In a virtual tie for the greatest number of endorsements last month was the Pacific/Hawaii and Southeast/Caribbean regions with 402 and 401, respectively. Both totals fell, though, by approximately 7% from 433 and 429 in August.
Meanwhile, New York/New Jersey and the Midwest saw the biggest percentage drops of over 20%. The former's volume decreased on a month-to-month basis to 86 from 111. September numbers in the Midwest finished at 146, compared to 184 a month earlier.
The three traditional HECM giants all posted monthly endorsement drops in September.
The leader on a rolling 12-month basis, Mutual of Omaha Mortgage, recorded 366 endorsements, down from 395 in August.
