Reverse mortgages

After volumes peaked at their highest in over a decade in March, the reverse mortgage market ended the year with a bankruptcy and merger involving its largest companies.

The Lansing, Michigan-based firm was awarded the contract this spring and takes over from Novad Management Consulting, which had previously serviced government-held HECMs since 2014.

The deal will close for $10 million in cash, plus the right to purchase nearly 33.9 million shares of common stock.

The year-end expiration date on two temporary measures designed to help older borrowers were pushed to December 2023.

But executives put a sunny spin on it, saying that its recent exit from forward mortgages will allow it to leverage reverse lending, where tailwinds will lead to profitability next year, management said.

Their summer gains come as home price growth begins to slip and reverse mortgage volumes hit a two-and-a-half year low in September.

In the face of a growing number in home-equity products, HECM endorsements dropped nationwide by over 43% on a monthly basis to its lowest point in more than two years.

But knowledge of HELOCs and HECMs is higher among Gen Z and millennials than boomers.

New home equity conversion mortgage endorsements slowed in April, but remained almost 50% higher than the level from one year ago.

Monthly growth for home equity conversion mortgages was observed across the country, with the Eastern U.S. seeing a significant uptick.