Year-to-date, home equity conversion mortgage volume is up a dramatic 49.9% compared to last year. But volume dropped sequentially for the first time in seven quarters. (Includes three data charts.)
Leaving the choice of index to the noteholder could lead to volatile payment amounts and default for the borrower as well as problems for FHA’s Mutual Mortgage Insurance Fund, the group says.
Borrowers and lenders increased their emphasis on ARMs in the second quarter as interest rates continued to spike. The loans accounted for more than 12% of total originations during that time. (Includes data chart.)
Banks and thrifts added a significant amount of first liens, with a focus on adjustable-rate mortgages, to their portfolios in the second quarter. Overall, holdings increased by 4.2% between March and June. (Includes data chart.)
Originations of adjustable-rate mortgages declined in the first quarter of 2022, but at a slower rate than the downturn in total first-lien production. ARMs accounted for 7.9% of total originations during the quarter. (Includes data chart.)
Originations of adjustable-rate mortgages declined by 4.8% from the third to the fourth quarter and by 13.7% for the full year 2021. Bank of America was the top ARM producer. The loans largely remain in portfolio. (Includes data chart.)
ARM lending ticked up during the third quarter though the ARM share of total originations remains well below the level seen in 2019. (Includes data chart.)
A rise in interest rates near the end of March helped lift ARM originations in the second quarter. Still, the product’s market share remained well below pre-pandemic levels. (Includes data chart.)