HECM originations sink to lowest level since 2020, HMBS issuance down 17% in September
Source: HousingWire ↗
September saw a sharp contraction in the federally insured reverse‑mortgage market, with Home Equity Conversion Mortgage (HECM) endorsements falling 6.7% to 1,790—the lowest monthly total since April 2020. The decline followed a steady stream of applications that stalled in lender pipelines, leaving fewer closed loans. Finance of America (FOA) remained the dominant originator with 408 endorsements, while Mutual of Omaha Mortgage and Longbridge Financial posted 366 and 342 respectively. Across the first three quarters, FOA’s cumulative endorsements reached 3,838, cementing its lead among the top five lenders, which together accounted for 59.1% of the market share, up from 55.9% a year earlier.
The drop in originations translated into a 17% reduction in HECM Mortgage‑Backed Securities (HMBS) issuance for September, falling to $446 million, $91 million less than August. FOA still led issuance at $175 million, though that too slipped from $257 million the prior month. Longbridge and Mutual of Omaha experienced only modest declines, while first‑participation pool volume shrank to $266 million from $309 million in August. New View Advisors warned that sustaining current production levels will be difficult as the 10‑year Treasury yield sits at its highest point since 2002, a condition that pressures the secondary market despite its overall health.
Industry commentary linked the slowdown to broader macroeconomic pressures. Dan Ribler of Longbridge highlighted that August’s Personal Consumption Expenditures index showed 3.4% annual inflation, prompting a bond‑market “bull steepener” that lowered short‑term yields while leaving 10‑year rates flat, reducing expectations of further Federal Reserve hikes. Michael McCully of New View noted that the reverse‑mortgage product has become “a belt‑and‑suspenders” safety net, yet the scarcity of new originations limits fresh issuance, leaving lenders and borrowers alike to navigate a tightening market environment.
⚡ Effects Interpreter
🌍World Economylow impact
What this means for you
- ▶Export-heavy economies may see demand wobble as buyers wait and watch.
- ▶Distant markets sometimes move on rumour before the facts even settle.
🏙️Local Economylow impact
What this means for you
- ▶Family budgets close to home might absorb a modest, slow-moving effect.
- ▶High street footfall and spending can shift subtly after this kind of news.
🏦Rates & Banksmedium impact
What this means for you
- ▶Mortgage costs usually follow the mood of the wider market.
- ▶Banks can adjust home-loan offers subtly after this kind of news.
❤️Healthmedium impact
What this means for you
- ▶Taking a break from the headlines can do more good than scrolling on.
- ▶Community spirit usually steadies nerves when headlines feel unsettling.
💷Wealthmedium impact
What this means for you
- ▶Time in the market usually matters more than timing the market around this kind of news.
- ▶Investors often reshuffle their holdings when stories like this break.
🏠Housinglow impact
What this means for you
- ▶Landlords weighing up rent rises might factor this into the decision.
- ▶Anyone house-hunting might factor this into their timing.
🌍 Effects for your country
The U.S.'s central bank rate currently stands at 3.75%, so a global rates move like this could feed through to local borrowing costs. The U.S.'s economy is growing at 2.3% with inflation at 3.2%, the backdrop this story's effects play out against locally. Housing-market effects like this are usually felt most where mortgage rates track the U.S.'s own central bank rate closely. With the U.S.'s unemployment at 4.4%, personal-finance effects like this land on a labour market that is currently fairly stable. Health-system effects are harder to localise from economic indicators alone — the real impact in the U.S. depends more on local healthcare capacity than the figures above.
The UK's central bank rate currently stands at 3.75%, so a global rates move like this could feed through to local borrowing costs. The UK's economy is growing at 0.8% with inflation at 3.2%, the backdrop this story's effects play out against locally. Housing-market effects like this are usually felt most where mortgage rates track the UK's own central bank rate closely. With the UK's unemployment at 5.6%, personal-finance effects like this land on a labour market that is currently fairly stable. Health-system effects are harder to localise from economic indicators alone — the real impact in the UK depends more on local healthcare capacity than the figures above.
France's central bank rate currently stands at 2%, so a global rates move like this could feed through to local borrowing costs. France's economy is growing at 0.9% with inflation at 1.8%, the backdrop this story's effects play out against locally. Housing-market effects like this are usually felt most where mortgage rates track France's own central bank rate closely. With France's unemployment at 7.9%, personal-finance effects like this land on a labour market that is already under strain. Health-system effects are harder to localise from economic indicators alone — the real impact in France depends more on local healthcare capacity than the figures above.
Romania's central bank rate currently stands at 6.5%, so a global rates move like this could feed through to local borrowing costs. Romania's economy is growing at 0.7% with inflation at 7.8%, the backdrop this story's effects play out against locally. Housing-market effects like this are usually felt most where mortgage rates track Romania's own central bank rate closely. With Romania's unemployment at 6%, personal-finance effects like this land on a labour market that is currently fairly stable. Health-system effects are harder to localise from economic indicators alone — the real impact in Romania depends more on local healthcare capacity than the figures above.
The UAE's central bank rate currently stands at 3.65%, so a global rates move like this could feed through to local borrowing costs. The UAE's economy is growing at 3.1% with inflation at 2.5%, the backdrop this story's effects play out against locally. Housing-market effects like this are usually felt most where mortgage rates track the UAE's own central bank rate closely. Health-system effects are harder to localise from economic indicators alone — the real impact in the UAE depends more on local healthcare capacity than the figures above.