Reverse Mortgage Applications See Sharpest Rise in Nearly a Year
Reverse mortgage applications saw an increase in August of slightly more than 8 percent. This according to a report from the Federal Housing Administration (FHA). Although this represents a decline of nearly 4 percent since the same period last year, the latest reading is the highest measured since last September.
However, an increase in the rate of applications is not unheard of prior to the ending of the fiscal year for the FHA. Additionally, another surge is expected during the fall as borrowers seek to maximize the amount of their loans prior to the lowering of principal limit factors coming from the Department of Housing and Urban Development (HUD).
With respect to the reduction in principal limits, experts believe that reverse mortgage applications are likely to begin to stall for the remainder of this year and for much of 2011. At this point, little is known about whether or not HUD plans to make any changes to this policy in the immediate future.
Other data emerging from the FHA showed slightly more than 200,000 applications were processed during August. Of these, more than half were comprised of mortgaged refinances with the balance made up of new purchase transactions and reverse mortgages. In terms of breakdown, the agency saw approximately 105,000 refinance applications, 87,000 new purchase applications and nearly 10,000 reverse mortgage applications.
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