Archive for the ‘ReverseIQ’ Category
HECM endorsements for November rose 12% to 4,690 loans, marking the impact of standard ARM applications taken before the Sep 30th program changes. We expect to see endorsements continue to be relatively strong for the next few months, but turn significantly lower toward the end of Q1 next year. New applications are falling well short of replacing pipeline fundings since principal limits were reduced.
On the bright side, despite all the program changes this year it’s been a growth period for the industry with volume up 15.9% through November, including 9 straight months of year over year increases since March. That coincides fairly closely with housing price upticks over the same time frame, but it’s more a case of no significant lender exits upsetting distribution and marketing reach this year alongside stabilized housing prices (which have been conducive to HECM growth since at least 2011).
Among the regions, 7 of 10 were up in November including a big 206 loan increase (23.6%) in Pacific/Hawaii and 32.3% increase in Mid-Atlantic. Phoenix continues to power a remarkable comeback, up 64.7% over last Jan-Nov and not a single metro is down in the region.
Among lenders, 6 of 10 were up, with another flat for the month.
Click the image below for the full report.
NRMLA’s annual convention is just around the corner. Since we want everyone feeling good and happy next week at the conference, lets look at the numbers on an annual basis, and see what kind of positive things we can find.
- Despite all of the pessimism and uncertainty and changes and all of the other headwinds the industry has faced, volume is up almost 17% vs last year. Yes, you read that right, 17% growth in an industry that has seen its main product eliminated and endured another bout of principal limit cuts.
- All ten of the HUD regions are up for the year. That is something we haven’t seen for a long time…
- Only eight of the HUD Field Offices are showing negative numbers year over year.
- Eight of the top 10 lenders are up for the year. 16 of the top 20. Not bad!
- The latest HUD applications report shows case numbers have been increasing nicely since April, and are back up to last year’s levels in August.
(If you are going to NRMLA and want to feel good about the industry, stop reading!)
The devil, of course, is in the details. In this case, its the monthly trends:
- October endorsement volume of 4,188 units is down 7.5% vs September, and is the second lowest total seen in the last twelve months.
- September application volume is probably going to exceed August, but the data we track internally shows that applications fell off a cliff in October with the new Principal Limit factors, and haven’t had any recovery. We are talking about more than a 50% haircut in application volume.
The takeaway from all of this: Enjoy the numbers for the rest of this year, ’cause next year they are going to get real ugly.
Updates from a broker and wholesale perspective have been hard to come by this year, but publishing this July edition of HECM Originators should give a better sense of total industry rankings including the effects of broker volumes.
We already know that HECM endorsement volume was up in July, but it had been harder to track business mix between retail and wholesale and combined volume rankings. We can see from this report that wholesale continues to hold steady around 56% of volume. It’s been as high as 61% and as low as 53% in the past twelve months.
From a lender rankings perspective, there’s a rather interesting spin happening right now.
- Liberty continues to hold the top spot by virtue of ranking 2nd in wholesale and 4th in retail
- Security One/RMS is ranked second, but at 4th in wholesale and 3rd in retail
- Urban comes in 3rd overall as the top wholesale lender and 7th in retail
- AAG is 4th with the top retail ranking and 8th for wholesale
- There’s also a larger loan volume gap between Liberty at 1st and S1L/RMS at 2nd compared to S1L/RMS and Generation @ 5th, showing the effect of tight competition for the 4 spots below our current largest lender
Find your company in the trailing twelve month rankings (page 3) or July rankings (page 4) by clicking the image below to access the report.