# Higher Rates Dampen June HECM Broker Activity, Atlantic Avenue Leads Market

Atlantic Avenue emerged as the top performer in June's reverse mortgage broker endorsements, though overall activity remained subdued as higher interest rates continued to weigh on the sector, according to analysis from Longbridge's Dan Ribler.

Reverse mortgage lending through the Home Equity Conversion Mortgage program, which serves primarily borrowers 62 and older, faced headwinds from elevated federal borrowing costs. The connection runs direct. When the Treasury yields rise, HECM program costs climb alongside them. Borrowers seeking to tap home equity found less attractive terms, and many postponed applications.

Broker endorsements, the formal step that commits a loan to the HECM insurance pool, ticked lower in June compared with prior months. This metric serves as a leading indicator for reverse mortgage originations. When endorsements fall, closings follow weeks later.

Atlantic Avenue's first-place ranking reflects market share gains even as the total pool of transactions contracted. The lender captured borrowers who remained committed to moving forward despite rate conditions. Competing lenders like Amerihome, Guaranteed Rate, and New York Mortgage Trust held positions in the market, but none matched Atlantic Avenue's momentum.

Dan Ribler's analysis for Longbridge connected the slowdown directly to the federal debt debate and its effect on Treasury yields. The ongoing discussion about the nation's fiscal trajectory pushed bond markets higher earlier in the spring, and those increases fed into HECM costs. Borrowers must pay mortgage insurance premiums, servicing fees, and interest. Rising rates inflate those totals immediately.

For borrowers and their families, this timing matters. A retiree considering a reverse mortgage to fund healthcare costs or home repairs faces fewer options and less favorable terms than they would in a lower-rate environment. The older demographic that depends on HECM products cannot easily defer decisions. Healthcare deadlines do not wait for rates to drop.

Lenders and brokers faced their own pressure. Reduced endorsement volume means lower origination volumes, thinner margins, and smaller compensation. Brokers who specialized in reverse mortgages saw June revenues compress. Those with diversified pipelines weathered the slowdown better.

The federal government's use of HECM as a policy tool also appeared in Ribler's analysis. The program insures loans, and the Mortgage Insurance Fund absorbs losses if borrowers default or if home values decline. Higher endorsement volumes boost premiums paid into that fund. Lower volumes strain it. The government's fiscal challenge thus extends into reverse mortgage policy, creating a feedback loop that affects program availability.

Looking ahead, broker activity depends heavily on whether rates stabilize or decline. The reverse mortgage demographic skews older and less price-elastic than traditional mortgage buyers. Once they commit to tapping home equity, they need product availability. If rates remain elevated through summer and fall, endorsement volumes could remain depressed through 2024.

Atlantic Avenue's June leadership likely reflects brand strength and customer service retention rather than any sector-wide recovery. The top lender pulled volume from weaker competitors as the pie itself shrank.