ReverseIQ Newsletters

Welcome to the New ReverseIQ

In the months since we launched ReverseIQ as a way to communicate some of our ongoing research and analysis to our clients and others in the reverse mortgage industry, we’ve noticed a few things:

• Length: Our newsletters tended to be long and rather involved. While that’s okay when you’re expecting to read a full analysis of an important trend, as a general rule most readers don’t look for dissertations in their email boxes. We’ll keep the new posts shorter, with more graphs and pictures to make it a quick read.
• Frequency: In part because of the complex nature of our posts (and our goal to have more than one subject for each), we generally published every other month rather than monthly. Under our new format, we’ll be publishing three free reports (see Content, below) and at least one original analysis each month.

Content

Retail Leaders is a free report identifying top reverse mortgage lenders and brokers, published in the first week of each month. In addition to listing all 100 of the top originating companies nationally, we break down each HUD field office for volume, endorsement growth and graph key stats like new lenders and endorsements per lender.

Industry Trends is a free report that dives deeper into the reverse mortgage industry in the third week of every month, illustrating several stats at state, county, city and even zip code levels. From the top 10 volume zip codes to the most penetrated cities in the country, you’ll see ground level information that has never before been available. There’s even a heatmap graphically displaying reverse mortgage activity across the nation.

Wholesale Leaders is a free report showing top originators through the wholesale channel in the last week of each month, shedding light on an area of the market that has seen tremendous growth but previously seen little visibility. In addition to listing top wholesalers, we provide total market share for combined retail and wholesale presence to gauge total market share and rank the top 100 lenders by total combined volume.

Last but not least, we’ll continue to post ReverseIQ posts in the second week of each month to highlight trends and opportunities to make money in reverse. From the suprising imbalance in refinance activity to the latest products and competitive pressures, we’ll continue to share new developments as we find them.

The new format and content is more useful and easier to digest for our readers. As always, we appreciate feedback, and if we’re not answering your burning questions, let us know.

The RMI Team

Riding A HECM Refinance Wave

We’ve now seen three months of reverse mortgage statistics since the HECM loan limits were raised (and perhaps ready for another increase soon?), so it seems like a good time to look at the early impact. January saw the industry experience its largest ever volume of refinance transactions (HECM to HECM), topping a thousand for the first time (1,078) and well ahead of the second largest month (873 in July 2007).

The chart above shows the bump in refinance transactions last month, with both December and January showing higher refi activity than any other month since July 2007. A more pessimistic observer might note, however, that volume for non-refinance loans was only slightly higher than last May, the lowest month last year.

The story gets even more interesting when we look at individual states. California is always fun because it’s been a great leading indicator for the whole industry.

California has been in a downtrend for over two years now, and seeing non-refi volumes at 2005 levels. Despite the picture, we’re actually cautiously optimistic on the state this year, with competition trends starting to improve (active lenders back to 2007 levels), but that’s a topic for another day.

Florida has virtually no refinance activity despite being the largest volume state (3% of volume vs. 25% in CA), which makes a very interesting comparison considering these two are usually lumped together as home price bubble states. This difference was good enough for California to take back the volume crown for one month at least.

Two things are striking about this chart:

• California and Florida are way out in front of the other states on volume
• Despite home price declines, California was a ripe opportunity for refinance

Moral of the story: National stats and trends are interesting, but the real money is in taking advantage of regional and local opportunities. And secondly, remember that refinance business is inherently unsustainable in the reverse mortgage business given an installed base of under 500,000 customers, so think carefully how you’ll invest your windfall from this refi wave into driving more sustainable volume through your franchise.

Until next time!