The new CFPB report looks at reverse mortgage activity through 2023
The Consumer Financial Protection Bureau (CFPB) released its report in December Mortgage market activity and trends for 2023 report, providing a brief look at reverse mortgage industry activity based on data from the 2023 Home Mortgage Disclosure Act (HMDA).
While the majority of the data largely excluded reverse mortgages from trends in the broader mortgage market, the report did include a section dedicated to the origins of Home Equity Conversion Mortgages (HECMs). This section did not take into account the proprietary, private-label reverse mortgages, which are becoming increasingly common in the industry despite the continued dominance of the HECM product.
“HMDA data is used to help determine whether financial institutions are meeting the home lending needs of their local communities; facilitating the distribution of funds by public entities to local communities to attract private investment; and help identify potentially discriminatory lending patterns and enforce anti-discrimination statutes,” the report said.
The report also delves into a common reality, which is that the industry’s top 10 lenders account for the vast majority of reverse mortgage originations in the US.
“In total, the ten largest mortgage originators accounted for nearly 22,000 reverse mortgage originations, or approximately 88.6%, of all reverse mortgage originations reported under the HMDA in 2023,” the report said.
The rankings are largely consistent with those of Reverse market insight (RMI) in early 2024, although there are some expected variations in overall production volumes given reporting requirements and approval data available at that time.
Among leading lenders, the company is now branded as Finance of America (FOA) – which still functioned as America’s finances in reverse (FAR) for all of 2023 – was the largest reverse mortgage lender reporting HMDA data in 2023. This accounted for approximately 30.6% of all reverse mortgage originations reported under the guidelines.
But this also includes origins that likely started under the former market leader American consultant group (AAG), which was acquired by FOA in 2023. Last year, the company announced that both FAR and AAG — which operated as the lender’s direct-to-consumer division after the deal closed — would be unified under the FOA. brand.
Mutuality of Omaha Mortgage was number 2 behind FAR with a market share of 22.5%, followed by Longbridge financial by 12.8%. A year later, Mutual of Omaha would overtake FOA/FAR on the leaderboard to become the largest HECM lender in the space, according to approval data from RMI.
The report noted that, unlike the term mortgage industry, “the values for reverse mortgage applicant income in the HMDA data are generally ‘not applicable’ and we do not use borrowers’ ‘lender mortgage insurance’ data have been excluded from the report’s reverse mortgage production table. .
