Home Equity Conversion Mortgage (HECM) origination activity sank again in August, with the nation’s top 100 lenders endorsing 1,919 loans during the month, down 5.7% from July. That represented the “lowest August total we’ve seen in years,” according to HECMWorld.com’s report based on data compiled by Reverse Market Insight.
The report, released Tuesday, showed that the top three lenders continued to dominate the market for federally insured reverse mortgages. Finance of America (FOA) was No. 1, endorsing 433 loans in August, but that was down 13.2% from July. Mutual of Omaha Mortgage was No. 2, with its 395 endorsements representing a 3.7% gain from the prior month, while Longbridge Financial was No. 3, as its 357 endorsements were up 1.7%.
The combined HECM market share for FOA, Mutual of Omaha and Longbridge stood at roughly 62% last month. Through the first eight months of this year, HECM endorsements declined 10.3% compared to the same period last year.
Goodlife Home Loans, Fairway Home Mortgage, South River Mortgage and Guild Mortgage took the fourth through seventh spots in the August rankings. Fairway was the only company in that group to grow its endorsements during the month.
Further down the list, there was a breakout performance by Minneapolis-based Luminate Bank, with its 37 endorsements in August up 48% from July and good for eighth place among all lenders during the month.
In August, Luminate announced the acquisition of select assets of First State Mortgage Services, expanding its presence across the central U.S. The deal added roughly $132 million in year-to-date loan production to Luminate’s volume of $2.2 billion, according to InGenius data.
Michael McCully, a partner at New View Advisors, recently told HousingWire‘s Reverse Mortgage Daily that proprietary reverse mortgages, senior-focused home equity lines of credit (HELOCs) and home equity investments are expected to continue eating away at HECM production.
“And as long as the securitization market doesn’t have any hiccups or bumps in the road — and spreads continue to tighten and investors gain confidence in the product — the space should drive more proprietary production volume, bring interest rates down and improve structures,” McCully said.
“No one can predict the future, but if all goes well, that will continue to outstrip HECM going forward. Lenders that offer proprietary products alongside HECM may not have been able to survive if they only had HECM. It’s been a lifeline for the larger players to have both proprietary and HECM business.”
HMBS issuance rises, with a caveat
While originations took a tumble in August, secondary market activity as measured by HECM Mortgage-Backed Securities (HMBS) volume rose, New View Advisors reported Monday. The 65 total pools issued last month were up from 59 in July, with the total issuance of $537 million in August representing a 16% monthly increase and a 7% yearly increase.
The top three issuers — FOA, Longbridge and Mutual of Omaha, respectively — accounted for 90% of HMBS volume last month. FOA topped the list with $257 million in issuance, up from $177 million in July. Longbridge slipped slightly, issuing $135 million in volume, down from $141 million in August. And Mutual of Omaha upped its volume from $85 million to $94 million during the month.
Other HMBS participants in August included Goodlife ($18 million) and Onity Mortgage Corp. ($9 million). Ginnie Mae/Reverse Mortgage Funding, aka “Issuer 42” issued no HMBS pools.
“There’s a fair amount of infrastructure necessary to run the HMBS business,” McCully told RMD of the shrinking number of players in the secondary market for reverse mortgages. “You’re the servicer of record. You have servicing oversight. You have risk management. There are many scenarios. One of the things that New View does for the market is value those future cash flows, and there are scenarios where you can lose money.
“Even though there’s a HUD insurance wrap, it’s not guaranteed for every possible scenario, and there are plenty of situations where issuers lose money. So if you’re not growing your business and you have to maintain that infrastructure for what is essentially a shrinking industry, it becomes economically unviable.”
New View reported this week that first-participation HMBS production in August totaled $309 million, up from $305 million in July but below the $322 million figure of August 2025. The company noted that issuers “will struggle to maintain this rate of production as the 10-year treasury yield continues its climb to 5%.”
During the first eight months of 2026, FOA leads HMBS issuance with $823 million, followed by Longbridge at $703 million, Mutual of Omaha at $487 million and Onity at $151 million. But Onity did not issue any first-participation pools last month and isn’t expected to going forward after selling its reverse mortgage servicing rights to FOA in July while exiting the originations business.
Of the 65 pools issued in August, 46 were tail pools, 18 were first participation and one pool included both types. First-participation pools are backed by previously uncertificated HECM loans, while tail pools are backed by new amounts lent from existing loans. Tail pool issuance in August totaled $227 million, up from $158 million in July.
New View also reported a total of 15 pools issued in August that were sized below $1 million, which capitalized on a Ginnie Mae rule allowing pools as small as $250,000. These pools accounted for $8.7 million of unpaid principal balanced that otherwise would not have been issued.