After four tough years, during which loan volumes were cut in half, the reverse mortgage market is showing signs of recovery. The latest Sequal/Deloitte reverse mortgage survey, released yesterday, reports a 22 per cent increase in settlements in 2010.The value of reverse mortgage settlements in 2010 was A$321 million - up from $263 million in 2009. The peak year for the market was 2006, when settlements were in excess of $500 million. Since then, a number of lenders have withdrawn from the market, unable to get funding.One outcome of these withdrawals is that marketing of the product has become virtually non-existent.While the survey contained good news for the sector, it also made clear that the market was still constrained. There was almost no fixed-rate lending, due, in part, to the fact that the innovative swap arrangements that enabled fixed-rate reverse mortgage lending in earlier years are no longer available.Last year, almost all loans were lump sums, and there were only a very small number of income streams. This was because of the presence of fewer lenders able to offer contractual draw-downs.Sequal (Senior Australians Equity Release Association) membership is down to 10 (in 2004 it was 18) and not all are active lenders.According to the survey, total market size was $3.01 billion at the end of last year and there were 41,600 loans outstanding. The discharge rate was 9.5 per cent.Average loan size has grown steadily, from $51,148 in 2005 to $72,474 last year. Borrowers usually draw down around 75 per cent of their facility initially and 25 per cent make additional draw-downs.Reverse mortgages will be covered in stage two of the national consumer credit protection legislation, which is due later this year. Sequal's chief executive, Kevin Conlon, said he expected that a couple of the industry's self-regulatory standards would be mandated in a consumer guide - the no-negative equity guarantee (the amount a borrower owes can never be more than the value of the property) and minimum disclosure.