New View: Proprietary loans now account for 40% of reverse mortgages

Reverse mortgage lenders were already starting to diversify their offerings earlier this year through the launch or expansion of proprietary product suites. These moves have become even more important at a time when federally insured reverse mortgages aren’t being endorsed.

As part of this emerging industry trend, New View Advisors recently announced that it would begin publishing a quarterly index that tracks the production of proprietary reverse mortgages. The index relies on data from public and private sources, including financial statements, rating agency reports and other information related to the securitization of proprietary reverse mortgages.

New View’s Proprietary Reverse Mortgage Production Index for the third quarter of 2025 estimates that lenders originated $650 million in proprietary products from July through September.

Additionally, through the first nine months of this year, there has been $1.8 billion in proprietary volume, compared to $3 billion in Home Equity Conversion Mortgages (HECM) volume. For September 2025 alone, New View estimated that proprietary loans totaled $210 million, compared to $310 million for HECMs.

Based on that data, proprietary loans represented 40% of the reverse mortgage market in September and 37.5% for the first three quarters of the year.

Proprietary loans once accounted for a tiny fraction of the market. A report released by the Federal Reserve in 2009 noted that “due to the current financial crisis, the private reverse mortgage market has evaporated so that HECM loans represent nearly 100% of the U.S. reverse mortgage market.”

By 2022, proprietary had loans achieved a market share of 15%.

This trend is likely to continue for the foreseeable future due to the current lack of HECM endorsements. The Federal Housing Administration (FHA) is not processing federally insured reverse mortgages during the ongoing government shutdown.

At last month’s annual meeting of the National Reverse Mortgage Lenders Association (NRMLA), a panel discussion touched on the demand for HECM products, which has plummeted 69% since 2022.

“We have a pretty significant decline coming at a time when you would expect the opposite, because we have an aging population and more home equity,” said Caroline Jensen, counsel for Mayer Brown’s banking and finance practice.

The discussion followed an announcement by the U.S. Department of Housing and Urban Development (HUD) that it’s seeking feedback on the future of the HECM and HECM Mortgage-Backed Securities (HMBS) programs. Its request for information included 21 questions, with comments due by Dec. 1.

Secondary market volume

Although HUD and FHA stopped endorsing HECMs at the start of October, secondary market issuance — based on FHA-insured loans originated prior to that point — rose on a monthly basis.

New View Advisors reported that HMBS issuance for October grew to $491 million, $36 million more than in September. The 73 pools issued in October were one fewer than the prior month.

That growth dovetails with a 7.2% increase in HECM endorsements in September.

The company’s analysis of individual lenders found that Finance of America was the top issuer in October at $164 million, up $13 million from September. Longbridge Financial was next on the list at $128 million, up $14 million from the prior month.

Mutual of Omaha Mortgage pulled back its HMBS issuance by $5 million, finishing at $96 million in October, while PHH Mortgage/Liberty Reverse Mortgage grew its volume by $13 million to finish October at $87 million.

New View also reported that October’s first-participation production of $335 million was up $22 million compared to September. Tail issuances — HMBS pools comprised of new amount lent, but not new loans — grew by $11 million to $189 million in October.

Of the 73 pools issued last month, 20 were valued at less than $1 million. Ginnie Mae allows pools as small as $250,000 — a change made in 2023 that resulted in $10.4 million in unpaid principal balance that might not have otherwise been issued in October.