Posts Tagged ‘Generation Mortgage’
TPO loan volume continued to grow in April, but wasn’t enough to keep wholesale endorsements from declining -13.3%. Retail fell further, down -18%, and the balance between the two channels will be an indication going forward to see if TPO volume is growing the business as non-FHA approved brokers jump in or just migrating FHA brokers to TPO producers.
Last month we showed a chart that illustrated the impressive growth of TPO loans and the clear lead of a few sponsors in this channel. The updated chart shows continued growth as TPO loans made up 30% of all wholesale loans in April, and also the more competitive nature of the business as many sponsors raced to catch up.
Metlife ran out to a big lead in March but grew slower in April, while Urban, Genworth, Generation, BofA and Security One all grew significantly to more than double TPO business from 360 to 735 loans. We’re hoping in the future to analyze just how much TPO business is coming from originators new to the industry, but for now it’s clear that the sponsor side is becoming a much more competitive market.
This month’s report also raises a point in the discussion about industry consolidation, as the table on top of page 2 illustrates that some of the largest lenders declined much faster than the industry in April. We don’t put too much weight in any one month’s results, but it’s startling to see that 88% of the industry’s decline this month came from just 2 lenders: Wells Fargo and Metlife.
The 2 lenders were 44% of the industry in March, so their decline is far larger than their market share. The smallest originators didn’t catch a break though: top 10 lenders Urban and One Reverse both saw 12 month highs and Security One came in just one loan shy of their recent peak.
Click the image below to access the full report:
As regulation forces the reverse industry to evolve, there are many ways that we’ll eventually see the impacts. We’ve been tracking a declining number of originators for quite some time, which is the expected result of many changes pushing revenue down and costs up for the smallest reverse originators.
The potential offset to that trend is just starting to show up, as TPO originations by non-FHA approved originators (working through an approved sponsor) grew dramatically in March. The chart below shows this activity by sponsor for the first three months of 2011:
While this activity wasn’t enough to keep broker/wholesale endorsements from falling -0.7% in March to 2,785, much less keep up with direct/retail endorsements that grew 10.8%, the sheer growth from February is astounding. At the most pessimistic it should ease the declines in the broker/wholesale channel, and an optimist might hope for a rebound given the potential of credit unions and community banks.
From a lender perspective, we saw 4 of the top 10 lenders hit 12 month highs in the month as the industry set its own high water mark for the same period.
- Wells Fargo captured 31.9% of all loans through both retail and wholesale channels, well above their 12 month share average of 26.4%
- Generation was whisper close to breaking double digits in market share at 9.7%
- One Reverse continues to grow their direct lending business, up 22.2% in the past 12 months and showing a 5% market share
- Sun West is on the comeback trail and back in the top 10 this month for the first time since November
One housekeeping note this month: As we noted in our Retail Leaders newsletter last week, we are not yet able to track non-FHA approved TPO originators individually, so you’ll notice a row in our lender listing of “Unknown”. That’s a summary line for all loans in this category for now, until we can track these individually (we’re expecting a few months).
And if you’re in DC for NRMLA’s Policy Conference, we’ll see you at the cocktail reception!
Click the image below to access the full report:
For the third straight month now, wholesale/broker endorsements shrank more than retail/direct endorsement volumes. In April, brokers saw 7.4% less volume while retail lenders shrank by 3.3%. Given what we already know about May’s low volume levels, we expect we’ll still be talking about declines in both business channels next month as well.
Brokers still hold a slight edge in total volume over the retail channel, but the gap is closing each month and could easily flip the other direction at any time with how close we are now. Large lenders continue to dominate the volume totals, accounting for 88.9% of volume in April. This is up a minor amount from March, continuing above trend for past 12 months.
We’ve heard a lot about licensing and testing requirements at non-bank originators driving many loan officers to move to national banks to escape these burdens, but at least so far we haven’t seen it affect volumes in the industry.
- Of the top 10 lenders, only 3 have grown retail volume in the last 12 months and 2 of those are non-banks: Generation and One Reverse
- The strongest retail grower over the same period is Metlife (national bank), which continues to grow strongly in both retail and wholesale channels, up 82% and 102%, respectively
- Looking at the fastest growing retail/direct lenders, 4 of the top 5 are non-banks – New Day, Guardian First, and Cooper and Shein (in addition to One Reverse above)
It’s still very early to close the book on this, but at the very least the incremental benefits bank originators should see from licensing requirements is getting muddled among the many other factors affecting retail volumes.
Be sure to click the link below to access the full report:
