Despite turmoil in the broader mortgage market, new data released by the U.S. Department of Housing and Urban Development (HUD) shows that on a calendar year basis, the number of federally-insured reverse mortgages closed in 2008 grew 6.4 percent to 115,176 loans.
"As more seniors try to figure out how to cope with today's economic conditions, the HECM program takes on increased significance," said Peter Bell, President of NRMLA.
A more detailed analysis of HUD data conducted by Reverse Market Insight, a consulting firm based in Aliso Viejo, Calif., indicates that three of the top 10 markets in the country are located in Florida. Miami was the top market in the country by a two to one margin. FHA-insured 9,561 HECM loans in the Miami metro area, followed by Los Angeles (4,126), Tampa (3,956), Santa Ana, Calif. (3,695), Baltimore (3,595), Phoenix (3,582), Orlando (3,556), Richmond, Va. (3,493), Philadelphia (3,317) and Chicago (3,184) to round out the top 10.
Further analysis by Reverse Market Insight shows that 2,949 lenders originated at least one HECM loan in 2008, a 76.5 percent increase over the prior year.
Bell anticipates newly enacted changes to the HECMincluding a higher loan limit, lower fees, home purchase component, co-op eligibility and stricter consumer protections around cross-selling reverse mortgages with other financial services products--will lead to even more growth in the coming months.
"The strong growth we're seeing suggests the HECM program remains a strong and viable option for America's seniors as they develop their financial plans for retirement," added Bell.
For more information, visit www.reversemortgage.org.