February 1, 2012
If your New Years resolution was to produce more loans in 2012, then you had lots of company along for the ride. January HECM endorsements totaled 5,175 loans, the highest level since September and up 11.6% from last month. On the pessimistic side, Oct-Dec are the only months lower than this total in the past 12, so it’s really a half glass of whatever perspective you’d like to see.
Volume was up all across the nation with the exception of New England dropping -8.8%. Rocky Mountain (28.2%) and Pacific/Hawaii (24.9%) fared particularly well, leading 6 of the 10 regions to double digit percentage growth. Rocky Mountain was also the only region to increase from January 2011, up 1.6% while the industry overall dropped -19.9%.
- Salt Lake City grew 50.7% from last January, powering the Rocky Mountain region totals
- Caribbean, which includes Puerto Rico, grew 26.9%
Among lenders, we saw 6 of the top 8 active lenders increase volume and 4 of those by double digit percentages:
- Security One led the way with a 27.9% increase
- Genworth saw a 26.1% increase
- Both companies posted their highest monthly total on record, although these numbers do include TPO business that wasn’t counted in historical numbers before 2011
- American Advisors (23.4%) and Generation Mortgage (17.2%) rounded out our double digit percentage growers for the month
Active lenders dropped significantly from last year, but that is almost entirely the result of FHA’s move to stop approving brokers which results in those companies not being counted in this total.
Click on the image below for this month’s report.
January 18, 2012
We’re getting closer and closer to the final reports of 2011, so we’ll preface next month’s numbers by showing one of the biggest trends of the past 3 years: Lender consolidation.
One of the questions we hear a lot is whether having more lenders is good or bad for the industry. Of course, most people dodge by saying that more of the right type of lenders is a good thing, which is much easier to agree with.
We can’t prove that more or fewer lenders is the better way to go, but one thing is becoming evident over time. Whichever comes first, lower active lender totals march in lock-step with lower loan volumes.
It’s no secret that endorsements have been lower the past few years, nor that there are fewer lenders actively originating HECMs. What’s striking about the chart is just how correlated the two trends have been. The endorsements figures are easy enough to find (any of our 3 monthly reports). You can find the active lenders count including TPO (red line in chart) in the top left box on page 2 of HECM Trends each month, and the FHA approved HECM lenders (blue line) in our HECM Lenders reports.
It’s also worth pointing out that as FHA switched from approved brokers to TPOs approved by lenders (gap between red and blue lines on chart), HECM volumes stayed in line with the red line that includes TPOs. This would suggest that the active originators metric including TPOs is more representative of the health of the industry.
Click on the image below to view the full HECM Trends report for this month.
January 9, 2012
We’ve known for months that Wells Fargo’s exit would have a major impact on HECM endorsement totals, with the expectation that all else being equal Wells’ huge retail market share would impact that side of the industry more directly.
October gave us reason to doubt that expectation, with the first half of Wells volume decline coinciding with a larger drop in wholesale/TPO volume than retail/direct. November brought us full circle as the second half of Wells volume decline saw wholesale/TPO rise to the challenge of replacing the former market leader.
Total endorsements were virtually unchanged in November, but wholesale/TPO grew 22.7% while Retail/direct dropped -11.8%. This stunning disparity brought wholesale/TPO share of the total market to the highest level in over a year at 42.5%.
From a lender perspective, there was plenty to cheer about on the leaderboard, as all but 2 of the 8 largest active lenders (ex Wells & BofA) showed gains in the month, with One Reverse and Security One being the only decliners. Metlife and Genworth both saw volume rise by triple digits.
November also saw big volume increases for some lenders outside the top 10, as Money House, iReverse and Cherry Creek all saw increases over 100% from October. Be sure to check page 4 to see where your company placed among the top 100 originators in November!
Click the image below to access the full report:
