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While it’s no secret fixed rate reverse mortgages have become more popular, you don’t understand how much has changed in the last year unless you look at a chart showing what type of loans are being endorsed each month.
Data from the US Department of Housing and Urban Development shows only 3.9% of endorsements during January 2009 were fixed rate HECMs. The adjustable rate reverse mortgage product dominated the marketplace with 95.87% of total volume during the same month.
Only a year later, fixed rate reverse mortgages grew to 68.28% of endorsements during January 2010, while adjustable rate products fell to 31.69% of endorsements.
Driven by investor demand for Ginnie Mae fixed rate HMBS product and lower costs for consumers, it’s no surprise there has been such a large shift.
For a larger version of the chart click here.
