• HOME
  • solutions
    • RECURSION ANALYZERS
    • Agency XRay
    • Mortgage Company Data
    • Recursion DataCloud
    • Customized Solutions
  • BLOG
  • CLIENT LOGIN
    • Agency XRAY
    • Recursion Analyzers
  • ABOUT US
    • OVERVIEW
    • OUR TEAM
    • Recursion In News
    • STRATEGIC PARTNER
  • CONTACT
RECURSION CO
  • HOME
  • solutions
    • RECURSION ANALYZERS
    • Agency XRay
    • Mortgage Company Data
    • Recursion DataCloud
    • Customized Solutions
  • BLOG
  • CLIENT LOGIN
    • Agency XRAY
    • Recursion Analyzers
  • ABOUT US
    • OVERVIEW
    • OUR TEAM
    • Recursion In News
    • STRATEGIC PARTNER
  • CONTACT
BLOG

The COVID-19 Virus and the Reverse Mortgage Market

4/14/2020

 
A reverse mortgage is a mortgage loan backed by a residential property, that allows the borrower to access the unencumbered equity in their home without making monthly payments. The loans are usually offered to senior homeowners. Currently, FHA has endorsed reverse mortgage loans an outstanding balance of 54 billion USD and these are securitized in Ginnie Mae’s HECM pools. This program is available for people age 62 and over.
​
There are many differences between reverse mortgages and regular (forward) mortgages, particularly that the balance of reverse mortgages tends to grow over time as interest accrues and sometimes payments are made to the homeowner. But in both cases investors face prepayment risk. The HECM loan tape disclosed monthly by Ginnie Mae provides data by many characteristics, including reason for prepayment and the age of the borrower.
Chart 1 shows the share of refinances for various reasons in Q1 2020. A relatively small piece is death of borrower, at just 9%. But this latter category is what is most subject to change due to the vulnerability of the older cohort to the COVID-19 virus, given the acute nature of the health impact.
​
When we look at the prepayment rate due to “Borrower Death” only in Chart 2, we see that it increases with age, particularly for those age 95 and above. It is unclear how these relationships will develop as a result of the virus, but access to digital tools and very large data sets is essential in monitoring market developments to better formulate private and public strategies to deal with the crisis.
Picture
Run Underlying Query
Picture
Run Underlying Query

    Archives

    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    May 2019
    March 2019
    February 2019

    Tags

    All
    Banking
    CMBS
    Cohort Analyzer
    Commercial Mortgage
    COVID 19
    CRT Analyzer
    EBO
    Fed Policy
    FHA
    Forbearance
    Ginnie Mae
    GSE
    HECM Analyzer
    HMDA Analyzer
    Mortgage Market
    Pool Level Analyzer
    Prepayment
    Recursion Achievement
    Recursion In News
    Reverse Mortgage
    Risk
    Team Building
    UMBS
    Underwriting

RECURSION

SOLUTIONS ​
Recursion Analyzers
​Agency XRay
​
Mortgage Company Data
Recursion DataCloud
Customized Solutions


ABOUT US  ​
Overview
​Our team
​Strategic Partner
CLIENT LOGIN   ​
Recursion Analyzers
​
Agency XRay

CONTACT

224 West 30th St., Suite 303, New York, NY 10001
Contact Us

Picture
Copyright © 2020 Recursion, Co. All rights reserved.​
  • HOME
  • solutions
    • RECURSION ANALYZERS
    • Agency XRay
    • Mortgage Company Data
    • Recursion DataCloud
    • Customized Solutions
  • BLOG
  • CLIENT LOGIN
    • Agency XRAY
    • Recursion Analyzers
  • ABOUT US
    • OVERVIEW
    • OUR TEAM
    • Recursion In News
    • STRATEGIC PARTNER
  • CONTACT