HUD today released the HECM statistics for April 2007.

After surpassing the 10,000 mark for the first time in March, Home Equity Conversion Mortgage (HECM) endorsements fell sharply in April to 8,041. This represents the first calendar month since July 2005 that HECM endorsements fell below their rolling 12-month average (see graph). It’s not clear if the sharp plunge from the March level is due to inter-month timing issues (Spring Break?) or if it represents a real falloff in HECM activity.

What is clear is that even with the decline, HECM activity in 2007 remains well above 2006 levels: through the first four months of 2007, 37,102 HECMs were endorsed - 49% more than the 24,924 HECM loan loan endorsements in the same period in 2006. Total HECM in the most recent 12-month period were 97,817 - 67% higher than the 12-month period ended April 2006.

On a related note, an article at Realty Times note that the reverse mortgage boom is especially impressive given woes prevalent throughout the rest of the mortgage industry. Commenting on Bank of America’s recent buyout of Seattle Financial Group’s reverse mortgage business, the article notes a lot of interest in the reverse mortgage arena from other major Wall Street firms:

Bank of America is hardly the only big financial player eyeing the steady march of the boomers toward reverse mortgage age eligibility. According to trade news reports, Wall Street giants Goldman Sachs, Credit Suisse, Bear Stearns and UBS are all exploring possible forays into the reverse mortgage field. Unlike Bank of America, which plans to retain all or most of its production in portfolio, the Wall Street investment bankers would likely securitize their reverse mortgages-pool them and sell them as bonds around the world.

Among the likely investors: Domestic and international pension funds, who would essentially help finance American boomer’s’ retirements while simultaneously growing the retirement funds of the new generation.

In sum, despite the surprising drop in HECM activity for April, there’s little doubt about long-term prospects for continued strong growth.

A Few More Related Articles of Interest:

Heatmap Compares HECM Activity: 2007 vs 2006

May HECM Activity Rebounds

HECM Lender Comparison 10/31/2007 vs 10/31/2006

HECM Market Comparison 10/31/2007 vs 10/31/2006

July is Second Best Month Ever for HECM Endorsements