Reverse Mortgage Volume Soars

The Federal Housing Administration insured an all-time high 1,800 reverse mortgages in June, putting the industry on a pace to break the annual volume record of 13,048, according to the National Reverse Mortgage Lenders Association.NRMLA said the most popular reverse mortgage product -- accounting for about 95% of the market -- is the FHA-insured Home Equity Conversion Mortgage. HECM volume is "probably much larger" than the numbers indicate, the association said, because the Department of Housing and Urban Development has a second category for "unendorsed" HECMs that includes loans waiting to be insured by the FHA. As of June 30, HUD reported 17,499 unendorsed HECMs, compared with only 7,945 a year earlier. "With the stock market boom over and interest rates down, many seniors are getting financially squeezed these days, no longer able to count on a healthy stream of dividends and interest income to supplement their Social Security," said NRMLA president Peter Bell. Senior citizens are using reverse mortgages to pay for such things as prescription drugs, in-home health care, and home improvements, the group said. A reverse mortgage is a loan that enables homeowners 62 or older to borrow against the equity in their home without having to sell it or give up title.