The state of the reverse mortgage business in early 2025

Longbridge Financial CEO Chris Mayer shared optimistic sentiments with RMD on this topic as well, particularly crediting the additional interest in reverse mortgages at the Mortgage Bankers Association (MBA) as a source of renewed optimism for forging stronger bonds between both sectors of the mortgage industry.

“It’s logical that, if you’re in the mortgage business, that you should want to serve people who own a third of the houses in the country, and it’s logical that MBA has wanted to do that. But that has required leadership, and the leadership at MBA, I think, should be complimented for taking a fresh look at the product, the industry and the program,” Mayer said in the interview.

Longbridge also started the early part of the year by updating some of the terms for its proprietary “Platinum” product suite, lowering the minimum required home value, and Larry Penn — CEO of Longbridge parent Ellington Financial — revealed that the company is developing a new product.

“Longbridge is actually actively working with some other partners to create some other products for seniors that may not technically be reverse mortgages but have a lot of similar characteristics,” Penn said in Ellington’s Q4 2024 earnings call.

Mayer’s optimism was shared by Finance of America (FOA) senior vice president of retail sales James Mittleman, who said that stronger bonds with the forward side could induce “more customers to potentially inquire [about reverse mortgages] who may not have previously,” Mittleman said in February.

Other lenders are also aiming to put this integration into practice, including Fairway Independent Mortgage Corp. In January, Fairway announced that the strength it’s observing in its Home Equity Conversion Mortgage (HECM) for Purchase business is pushing the company to “expand its reverse mortgage channel through aggressive recruiting, strategic partnerships, and […] integration of its forward and reverse businesses,” it said.

Mutual of Omaha Mortgage is also moving quickly, having become the No. 1 lender in the industry based on its HECM endorsement figures. It has maintained that position consistently through 2025 so far, but FOA has nipped at its heels: only 18 loans separated the two lenders in February, according to RMI data.

Performance metrics

Speaking of those endorsement metrics, RMI President John Lunde told RMD that he feels like the business is in a slightly stronger place than he was expecting it to be at the end of 2024.

“I would say things are less soft at this point than I might have expected a couple months ago, like at the end of the year,” Lunde said. “If you asked me where we were going to be for January and February, I probably would have guessed a little lower than where we ended up.”

In January, HECM endorsements increased by 0.6% to 2,641 loans for the month. In February, they slightly declined by 6.1% to a total of 2,481, an improvement on the totals seen in the same month of 2023 and 2024 but still below January’s figures.

But the lack of overall softness is an encouraging development, he said, and while lenders are working diligently to increase their volume they also still have to contend with rates being higher than the mortgage industry broadly would like them to be. 

“In the context of reverse, there’s just such a direct relationship [with rates], whereas on the forward side, it’s a little more fluid, I think,” Lunde said.

The increase the industry saw in the 10-year CMT around the fall of last year led Lunde to believe that things would taper off more than they actually did in the early going of 2025.

“To not really see significant deterioration from that point in Q4 is encouraging,” Lunde said. “February is always tough, just because it’s such a short month, so I don’t worry too much about that. But, it’s harder these days than ever before, just because we don’t have some of the early indicators we usually rely on, like the case numbers issued.”

Data, ‘pent-up demand’

Federal Housing Administration (FHA) reports on reverse mortgage metrics have been delayed, and there is not an indication from the agency regarding when or if those reports will return.

Since the transition to the Trump administration, several government reports and websites have been changed to remove data that was previously accessible, though some of that legacy data has been restored in compliance with court orders or other departmental actions. But certain industry-relevant FHA reports, including the HECM “snapshot,” have not been updated since October, 2024.

Still, business is humming along. While it can’t be expected to boom with rates where they are, Lunde said that in other conversations with forward mortgage or real estate professionals he has sensed a “thaw.”

“People have been waiting and hoping for things to improve for long enough that there’s just pent-up demand, which I find interesting,” he said.