May 1, 2013
After a big improvement last month, HECM endorsements declined slightly in April to finish at 5,770 loans, down -1.2% from March. That figure was still good enough for 2nd highest in the past 12 months, behind only last month.
Regional volumes were mostly down, with 6 of the 10 regions declining.
- The top 2 regions, Southeast/Caribbean and Pacific/Hawaii both increased, each turning in their highest performance of the past 12 months.
- Rocky Mountain and New England also increased, with the former also setting a 12 month high and the latter just missing.
- Midwest declined the most, dropping -17.1% from March. Don’t let that fool you though, this region is up the most year to date at 20.9%.
Among lenders, there continues to be a shakeup as Metlife and FNB Layton are slowly working their way out of the top 10.
- Liberty retains its number one title for the trailing 12 months but Security One is close behind and took the top spot for April’s single month volume
- One Reverse continues its steady ascent up the charts with its first month above 500 loans endorsed
- As Metlife and FNB Layton drop off, it looks as though Sun West, Maverick and Associated Mortgage Bankers are in a three way race to jump into the top 10.
HECM Originators and HECM Trends are expected back shortly, hopefully this month. Cross your fingers that doesn’t fall to the sequestration ax!
Please click the image below for the full report.
April 2, 2013
HECM endorsements climbed 20.8% in March to their highest level since June 2011. That date is significant, in that it was the last month Wells Fargo was fully active in the industry, although their endorsements were reflected for a few more months after their exit announcement. Either way, it’s a significant hurdle for the industry to cross and shows the power of recovering housing markets to drive reverse mortgage volume.
The rebound in reverse mortgage volume (from depressingly low levels to be sure) is coming from two primary drivers. The first is increased consumer demand, as evidenced by HECM case numbers issued by FHA, which is the industry’s approximation of applications. Figures are only available for entire industry through January, but those reflect increasing demand as shown in chart below.
January cases issued came in at 8,593, roughly in line with the last month of Wells accepting applications for reverse in June 2011 and 48% above the low from January 2012 at 5,795.
Conversions of case numbers issued into endorsements is also improving lately, likely resulting from better appraisals as housing markets improve.
Using our 4 month lag rule (cases issued turn into endorsements 4 months later), conversion rates for November cases issued (the most recent period at least 4 months seasoned) were 79%, a figure we also haven’t seen since early 2011.
Putting these trends together, it’s no surprise that endorsement volumes are trending higher. In our view the suspension of HECM standard fixed won’t change this trend meaningfully, but 2014 and beyond could show significant impact from changes FHA makes to the HECM program by September 30 to respond to MMI fund weakness and legislative pressure.
From a regional perspective, 7 of 10 regions were at 12 month highs – and significantly it was the top 7 regions where volumes are meaningful to national trends.
Among lenders, Liberty Home Equity Solutions continues to power ahead as the largest lender, reaching a second all time high in the past 3 months. Proficio joins the top 10 with its own all time high as well, on a run rate that would put it 8th.
HECM Originators and HECM Trends are expected back shortly, hopefully this month. Cross your fingers that doesn’t fall to the sequestration ax!
Please click the image below for the full report.
March 1, 2013
HECM endorsements declined -6.9% in February after a surge in January, but stayed well above the average for the prior 11 months at 4,833 loans.
Some regions of the country were more affected than others by the small decline, while others broke the trend to increase from January:
- Midwest, Pacific/Hawaii and Great Plains all saw new 12 month highs, growing 11.3%, 10.5% and 8.2% respectively
- Rocky Mountain showed the biggest drop, down -23% afer surging to a new high last month
- All other regions declined -6.9% to -14.4%
Total industry volume is down -5.5% compared to the first two months last year, but there are still regions and metro areas showing growth:
- Southeast/Caribbean is up 2.6% from last year, with all metros outside of Florida and Caribbean showing positive growth
- Jackson, Memphis and Louisville are particularly strong – all growing more than 20%
- Pacific/Hawaii is also growing in several places, especially Arizona and other areas that were hit harder by the housing price crash
- Vegas is still taking it on the chin, but inland CA regions like Fresno and Sacramento are coming back as home prices stabilize
Several lenders have also seen good starts to the year:
- Liberty Home Equity officially took the top lender spot on a trailing twelve month basis, despite a decline from last month and their year to date volume is up 40%
- Security One Lending continues to see big gains that might be a good proxy for their growth from Metlife team additions, up 197% year to date
- American Advisors Group is up 124% year to date to round out the top 3
HECM Originators and HECM Trends are expected back shortly, hopefully this month. Cross your fingers that doesn’t fall to the sequestration ax!
Please click the image below for the full report.
