After a lengthy delay, we finally have the Wholesale Leaders Report for May available, and the results certainly reflect the trends seen in the HECM Endorsement reports.
Overall Wholesale volume for the month of May was down 20% from the prior month, to 4,275 units. This compares to a 35.5% drop in direct endorsed loans, and a 28.4% drop in overall endorsements – and marks a change from the previous months where the wholesale business underperformed.
Financial Freedom regained the top spot on a combined (retail + wholesale) trailing twelve month basis, holding an 18.1% market share, slightly higher than Wells Fargo’s 18% share. If we dive deeper into the numbers, the story changes dramatically – despite holding the overall lead for the trailing 12 months, Freedom’s wholesale business trailed the likes of BofA, MetLife, and World Alliance Financial in the month of May.
On a somewhat odd note, the only two wholesale lenders that saw volume growth in May were JB Nutter and World Alliance Financial. JB Nutter is recovering from their warehouse line issues, and, well, we all know what is happening at WAF right now, so it’ll be interesting to see where their customers go until the situation gets resolved.
As always, your questions and comments are welcomed – enjoy the report.
Retail endorsement results are out for the month of June, with overall volume for the month coming in at 8,633 units – a 2.8% increase over May, but still significantly below the average for the last 12 months. Unfortunately, the relatively weak numbers for June now put the industry slightly behind 2008 volume, trailing by 0.6%.
- Despite the decline in loan volume, the decline in new lenders and total active lenders (see charts on page 2) has been somewhat larger – resulting in an increase in average loans per lender. Given that this is one of the key barometers of profitability for the industry overall, I’m sure you don’t need us to tell you that this probably feels a lot better than last year’s precipitous drops in this metric.
- There’s really not a whole lot to talk about performance-wise this month. Things are essentially flat across the board, with the notable exception that Financial Freedom had an ugly month endorsement wise. We’re pretty sure this is an aberration, perhaps due to the name change or other transition issues, and would expect them back to their normal levels in the next month or two.
- On a more positive note, MetLife had their best endorsement month ever, so hats off to them. We suspect it might be due to their fixed rate product offerings as we’ve previously noted, but we’ll update the analysis as we gather further information.
For those of you who are pining for the May updates of Industry Trends and Wholesale Leaders, we apologize for the delays but the numbers are taking a bit longer than usual this time around. We’ll post as soon as we finish updating our abacus.
Product Updates
We had a lot of feedback asking for a company specific version of the Retail Leaders report, so we’ve obliged and created a version specific to your company. In celebration of its launch, and the upcoming 4th of July holiday, we are offering it for $25/report, or $250/year for the next few weeks! Learn more about the new “Pro” HECM Report.
Ginnie Mae HECM Model
We’ve been doing quite a bit of work recently valuing HECM servicing and particularly modeling GNMA issuance economics. The financial crisis has proven beyond a doubt that no one can predict the future, but we’ll simply say that if you’re selling GNMA HMBS, make sure you at least have a clear expectation for your economics and liquidity on the deal. And if you want to talk about how we assist clients in this vital area, give us a call.
