• Where ARMs once dominated the landscape (all at a single margin of 150 on the same CMT index no less!) fixed rate HECMs have been 2/3 or more of volume for over 2 years. That change happened in less than 6 months.
• Where this business was once powered by “kitchen table” salespeople at Wells Fargo, Bank of America, Metlife and Financial Freedom, we saw 2 of the top 3 lenders in March (page 4) were independent reverse mortgage lenders exclusively originating through their call centers.
• Where there previously was one HECM (Standard) focused on one customer niche (immediate cash), we now have two more HECM products that better suit financial planning (Saver) and home purchases (Purchase).

Beyond the shifts mentioned above everyone has had to adjust to an industry with fewer loans in the past few years, even if many companies are doing better than ever. That volume shift became most apparent to us this month when we noticed our top 10 zip code rankings were only returning 6 entries.

To make a long story short, we realized we had restricted the rankings to only zip codes averaging 5 or more loans per month. This made sense a few years back when there were several hundred zip codes each month with this level of volume but that list was down to 24 in March and most of these were lower Jan-Feb resulting in just the 6 zip codes with 5+ on average in Q1.

This volume decline is not groundbreaking news to anyone since we’ve been reporting on it for years now, but it does highlight the need for everyone to adapt. The report below has some great information to follow the industry nationally and we’re happy to provide it if that’s all you need.

If you would like to see local statistics that can help you work smarter and target your sales and marketing efforts for optimum results, this week is a great time to learn more in person. Schedule some time to sit down with us at NRMLA Irvine this week, or just give us a call if you’re not planning to attend.

Click on the image below to view the full HECM Trends report for this month.

Broker/TPO channel business declined dramatically, dropping -26.6% compared to -12.8% for retail/direct. This relative performance gap has swung both ways in recent months, but retail continues to comprise 55-60% of all volume.

Given that we’ve seen industry volume numbers decline while individual lenders grow volume, there is more attention than ever being paid to lender rankings. We’ve heard many lenders targeting a top 10 ranking in the wake of big lender exits – in the past 12 months any lender averaging 100 loans per month or more made the cut. For Q1 the bar was even lower, down to 65 loans per month.

If you’d like to hear more about how our sales and marketing tools can help you get there, drop us a line to schedule a call or better yet, a meeting next week at NRMLA Irvine.

Click the image below to see the full report, including rankings of all HECM originators including TPOs:

From a regional perspective it was an even 5 up, 5 down month, with the two biggest regions (Southeast/Caribbean and Pacific/Hawaii) both snapping back to February levels.

March case numbers issued also had a bit of good news for us, rising 4.1% from Feb to 7,075. Oddly enough Feb-Apr all have the same number of business days, so it’s a clean comparison to see business trends this time of year.

We aren’t going to weigh in on the Metlife news/rumor mill – we’ll stick with the likely volume implications in coming months based on what we’ve seen happen in last year’s lender exits. Barring any immediate big announcements we can expect May and June case numbers issued to drop 11-15% as loan officers close out their pipelines without taking new applications. After that, the best case scenarios for industry volume might see an additional 1-2 months of transition during hiring/training/licensing/marketing ramp up at a new firm.

The less optimistic scenarios would just extend those timelines out and/or show a number of loan officers leaving the industry, both of which would push application and endorsement expectations lower.

Pretty much any way you slice it, we should all be expecting <60,000 endorsements for calendar year 2012. Taking the under was already a slightly better bet before Metlife’s announcement, so from here the pessimistic scenario would land us at just over 55K loans. That assumes no new case numbers post 4/30 from the Metlife retail team and a stable level per business day from all other companies.  Lots of other better scenarios are possible, but very unlikely for any of them to produce 60K or more endorsements in 2012.

Click on the image below for this month’s report.

This month, we can officially ring the bell that New York state has passed Florida for the #3 state ranking for HECM endorsement volume.

New York and Florida have been neck and neck for most of the past year, but given the dramatic jump in February for New York (green line) it seems likely that for the near future at least we’ll be talking about CA, TX, and NY as the big 3.

It’s also no secret where the volume is happening, as NY is the only state beside CA with 3 counties in the top 10 list nationally. Suffolk, Nassau, and Queens are all on Long Island in the greater NYC metro area – and they’re also the only 3 counties in the top 10 showing growth from 2011.

Somewhere in the big city, a street vendor is already selling an update on the classic t-shirts: “NY Loves HECMs”

Click on the image below to view the full HECM Trends report for this month.

This is the second month in a row we’ve seen TPOs (wholesale) outperforming direct lenders (retail) and the third month in the past four. Even more interesting, all three have come in growth months for wholesale, whereas in the past year it was the lesser victory of declining less than retail.

Put these months together and we have wholesale surging from 1,612 loans in October to 2,547 in Feb, an increase of 58% while retail dropped -5.3% over the same time period. These swings are in the context of a much bigger shift in the past two years as wholesale has declined significantly from early 2010, but the bounce back is quite significant in size thus far.

Next month we’ll have to see which channel performed in the face of a sharp drop in endorsements for March.

A note on chart methodology: The chart above is indexed to October 2011 for both retail and wholesale volume, so a reading of 95 would mean that volume in that month was 5% lower than October 2011.

Check out the full report below, including rankings of all HECM originators including TPOs. Click the image below to access the full report:

This marks the first time endorsements fell below the bottom of May 2010 after FHA’s October 2009 reduction in HECM principal limits. It makes perfect sense given that case numbers issued in January fell to the lowest level since May 2005, but we’d also expect at least one more month of similarly low (and probably lower) volume before February’s bounce in case numbers issued resuscitates endorsements a bit.

The above chart shows this is not a seasonality nor business day related drop, as the pattern for Jan/Feb follows the past 2 years closely but is simply shifted downward.

Turning to the report details, the decline in endorsements was broad based as all ten regions saw a decline of -11% or more from Feb. Among lenders, the only top 10 lender showing a gain was American Advisors Group, up 28% and showing the second highest total in its history.

Click on the image below for this month’s report.

This month, we found the first hint of that silver lining in our rankings of the top 10 counties by volume on page 1 of our HECM Trends report. After noticing that the 2 counties (Miami, FL and Riverside, CA) in our list showing growth from last January were definite “housing bust” areas, it got us thinking about where else we might find some growth.

After looking at the top 5 counties in several states, a pattern started to emerge. After several years of seeing states and counties with lower volume catching up with their leading peers, it seems that in several cases historical leaders are re-emerging as growth areas thus far in 2012. (Please note that all graphs are best viewed in larger format by clicking on each image below).

Perhaps the best example of growth is in New York, where we see Suffolk and Nassau counties reaching their highest levels in 2 years. The state’s HECM volume wasn’t hit as hard by the housing bust as others, and both counties are in shouting distance of all time highs from 2009.

Next comes the other end of the spectrum, where Miami is showing YTD growth, but remains a pale ghost of its former self as a leading HECM market. What’s interesting is that volumes thus far in 2012 are well above the trend from the past 12 months, so perhaps the rumored Florida home price stabilization that Dennis Loxton keeps sending us article links to is benefiting reverse mortgages as well.

Last but not least we come to our own home state of California, where Riverside caught our attention originally but San Diego and Los Angeles appear to be on the upswing as well. The coast is king in California real estate, and as go the coastal counties will go the whole state’s reverse mortgage industry in the foreseeable future.

Click on the image below to view the full HECM Trends report for this month.

More and more people have been asking where they can find rankings of broker/TPO companies now that FHA no longer includes these originators in the F17 report the first of each month. The answer is in our HECM Originators report, which shows both year to date and monthly rankings of the top 100 originators (whether lender or broker) by volume.

Last year when FHA stopped including brokers in their volume reports, we re-designed this report and added a fourth page to ensure that all companies would have an equal chance to feature in the top 100 companies.

If your company endorsed 8 or more loans in January on a retail/broker basis (excludes wholesale) and is not listed on page 4 of our rankings, please let us know!

And if you want to see your company ranked among the top companies in the industry, generating 7-8 loans every month is all it takes to get in the top 100 right now.

Click the image below to access the full report:

Six of the ten regions we track were up from January, with the biggest gainer being New York/New Jersey. Volume there was up 31.5% to 723 loans and the highest since last March. The region is led by New York City itself, up 6.1% from last year, while many of the surrounding areas in NJ and upstate NY are struggling thus far.

The top 8 lenders were evenly split, with four gaining and four declining. Growth was led by the First National Bank of Layton as it hit a new all time high in the month, and Genworth rising 66.6% to 643 loans.

Unfortunately, there is a dark cloud hanging over the growth as January case numbers issued suggest declines in the near future.

Case numbers issued tumbled -4.9% to 5,795, for the first time breaking the lows reached in October 2009 after the first principal limit reduction. To find a month with lower volume we have to go all the way back to May 2005.

Needless to say we can’t expect endorsements to keep going up with case numbers issued headed down, so it looks like tough sledding on the endorsement side for the next couple months at least.

Click on the image below for this month’s report.

The final tally for the year comes in at 68,566 loans, down -5.7% from last year and capping off 3 consecutive years of industry volume declines. The best to be said for that trend is simply that the bar keeps getting lower for growth and 70,000 units only looks good from below.

Nevertheless, there have been some areas bucking that trend and this year was no exception. We’ve written about Saint George, UT, which continues to top all 4 MCA growth tables on the bottom of page 2. Texas, North Carolina, Philadelphia, and Baltimore have also been profiled in past reports and continue to appear on our lists of top states and cities by volume.

Click on the image below to view the full HECM Trends report for this month.