Volume was up all across the nation with the exception of New England dropping -8.8%. Rocky Mountain (28.2%) and Pacific/Hawaii (24.9%) fared particularly well, leading 6 of the 10 regions to double digit percentage growth. Rocky Mountain was also the only region to increase from January 2011, up 1.6% while the industry overall dropped -19.9%.

• Salt Lake City grew 50.7% from last January, powering the Rocky Mountain region totals
• Caribbean, which includes Puerto Rico, grew 26.9%

Among lenders, we saw 6 of the top 8 active lenders increase volume and 4 of those by double digit percentages:

• Security One led the way with a 27.9% increase
• Genworth saw a 26.1% increase
• Both companies posted their highest monthly total on record, although these numbers do include TPO business that wasn’t counted in historical numbers before 2011
• American Advisors (23.4%) and Generation Mortgage (17.2%) rounded out our double digit percentage growers for the month

Active lenders dropped significantly from last year, but that is almost entirely the result of FHA’s move to stop approving brokers which results in those companies not being counted in this total.

Click on the image below for this month’s report.

October gave us reason to doubt that expectation, with the first half of Wells volume decline coinciding with a larger drop in wholesale/TPO volume than retail/direct. November brought us full circle as the second half of Wells volume decline saw wholesale/TPO rise to the challenge of replacing the former market leader.

Total endorsements were virtually unchanged in November, but wholesale/TPO grew 22.7% while Retail/direct dropped -11.8%. This stunning disparity brought wholesale/TPO share of the total market to the highest level in over a year at 42.5%.

From a lender perspective, there was plenty to cheer about on the leaderboard, as all but 2 of the 8 largest active lenders (ex Wells & BofA) showed gains in the month, with One Reverse and Security One being the only decliners. Metlife and Genworth both saw volume rise by triple digits.

November also saw big volume increases for some lenders outside the top 10, as Money House, iReverse and Cherry Creek all saw increases over 100% from October. Be sure to check page 4 to see where your company placed among the top 100 originators in November!

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HECM endorsements for October were down -16.8% to 4,653, the lowest total since the industry bottomed out in May 2010 from the first principal limit reductions. Wells Fargo wasn’t totally absent from October’s endorsements, with 787 loans still good for second place behind Metlife, but that’s probably more bad news than good.

We’re almost sure to break last year’s bottom next month as Wells volume declines further, and if other lenders can’t pick up some of the loans Wells isn’t doing, we could be looking all the way back to July 2005 for the last time monthly endorsements were under 4,000.

What is more surprising than the Wells decline, which has been expected, is the relative weakness of several other lenders in the month. Metlife, Urban, Generation, and Security One all declined in October. The aggregate decline of these 5 lenders is slightly larger than the total industry decline, while One Reverse, Genworth, AAG and Reverse Mortgage USA helped stem the tide.

These numbers include TPO business under the new HUD system, so we’ll have a better read for retail/broker/TPO trends next month when we can dissect further in our HECM Originators report. For now, we can simply observe that so far, the industry does not seem to be making up for the branch distribution network losses of BofA and Wells.

Click on the image below for this month’s report.

We commented last month on the relatively narrow performance gap between retail/direct and broker/wholesale volumes as the changes from broker approval to TPO and lender compensation regulations worked its way through. This month the gap has opened back up, with retail/direct up 10.5% while broker/wholesale shrank -2.8%. We haven’t seen that large of a gap since February, as you can see from the table on page 1.

We’re not sure what’s causing the change, or even if it will continue, but we’ll be watching closely in the next few months.

Several lenders are seeing impressive growth in their businesses, with most of that coming on the retail side:

• American Advisors Group and Metlife have each grown retail more than 90% so far this year, while One Reverse, Generation and Genworth have all grown 20% or more
• Security One wholesale has grown 38.8% so far, while Urban is up 6.5% on a much larger base
• First National Bank of Layton has been steadily climbing the rankings this year, and reached the top 10 for the month of August with a 9th place ranking.

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While we continue to trend lower than last year on the volume side for the third straight month, what’s starting to emerge from the monthly numbers is the sense of clear winners from the exit of BofA (Wells hasn’t really affected these numbers yet). On the list of winners, Metlife, Genworth and Security One come out near the top given their dramatic jumps since the first quarter.

Regionally, 7 of the 10 regions increased in September in contrast to the overall down month nationally. As we commented upon previously, the highest volume markets lagged: the bottom 6 regions increased 118 units while the top 4 dropped 335, even after accounting for a small increase in Pacific/Hawaii.

• Northwest/Alaska had the largest unit volume increase, up 33 units or 12.0%
• Rocky Mountain had a slightly higher percentage increase, up 12.6% or 29 units

Click on the image below for this month’s report.

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.

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• Broker/Wholesale endorsements for January came in at 2,413 units, up 9.3% from December but down 45.8% from a year ago
• Retail endorsements totaled 4,049 units, down 6.8% from last month but up 27.7% from last year
• Brokers contributed 37.3% of all units, up from 33.7% last month but down from 58.4% a year ago

The divergence between channels is particularly striking this month because Retail was entirely responsible for the industry decline. It’s way too early to attribute the weakness to BofA’s exit (we won’t see that effect until at least March or more likely April endorsements, so we can probably expect some bounce-back from Retail in February results if our client conversations are any indication.

Indeed, BofA has had its two best endorsement months since February 2010 as the chart below illustrates.

What’s most interesting is that broker/wholesale business has grown very little from the lowest levels in last years for BofA, while retail has recovered with the rest of industry. We’ve heard from several people in the industry that this directly related to the decision not to pursue certain types of broker/wholesale business, and whatever the cause the effect has been clear on this chart.

There was a wide divergence among other top 10 lenders in January, as Genworth and Urban both saw strong recoveries from what now look like hiccups in December, while Financial Freedom had the most notable decline to a multi-year low.

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We asked last month why the volume recovery has been so narrow since May, primarily benefiting just 3 major lenders. As we discussed in last month’s report, July volumes were higher than May for only 5 of the top 10 lenders. This month, we find 7 a broader recovery with 7 of the top 10 seeing volume growth since the industry’s low point in May. Even more encouraging, the largest lender in our business saw a nice 12 month high in August, moving back to 2,000 loans for the first time in 16 months (April 2009).

While that might be small comfort to anyone whose compensation isn’t tied to Wells Fargo’s performance this year, our industry can benefit from the success of large, visible brands as we’ve seen time and again over the years.

A few other lenders stand out in this month’s report:

• Genworth continues their healthy recovery from May, with growth of 250% and their highest volume since September 2009
• Security One Lending appears to be on the comeback trail as well, also showing their highest volume since in 11 months
• The race is heating up for second place, with Metlife gaining ground on longtime industry leader Bank of America (and Seattle Mortgage previously). Metlife’s growing retail presence and continuing wholesale strength puts them within shouting distance for number 2 overall. BofA leads by over 3,000 loans for the last 12 months, but if both lenders turn in identical totals in September Metlife would still shrink the gap by 24%.

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Both Retail and Broker/Wholesale volumes were up in July (albeit off the pace of a furious bounce back in June), but the contrast couldn’t be clearer: Retail growth was more than 3x as fast as Broker/Wholesale, further widening the lead Retail only recently gained in total volume.

Among lenders, there’s a very interesting divergence happening as well. From a combined Retail/Wholesale perspective, many of the top 10 lenders are under-performing the industry’s growth rate since the May low point, but 3 lenders are striking exceptions:

• Genworth is up 228% to 581 units, with much of the growth coming from Wholesale
• Metlife is up 85% to 1,062 units
• Wells Fargo is up 37% to 1,460 units

Doing some quick math, it’s clear that these three lenders alone accounted for 97% of the increase in units from May to June for the entire industry. That’s perhaps the best example we’ve ever seen of a very narrow recovery in volume, which begs the question why these three are succeeding so much more than the rest of the industry together.

These are  large institutions but there are other large institutions here that did not see similar growth, and 1 of the 3 isn’t an HMBS issuer so that argument has holes too. We don’t have an answer to this riddle for you this month, but for now we’re content to simply live in interesting times and hope someone does a case study someday.

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July saw another double digit increase in HECM endorsement volumes over June, up 11.3% to 5,901 loans.  Still well off last year’s pace, but gaining traction as the application volume increases indicated a few months back.

• July’s strength was broad based, with the 8 higher volume regions all showing increases and only Rocky Mountain and Great Plains declining.  Both of the decliners have consistently been the smallest volume regions anyway, so they didn’t slow the overall industry growth significantly.
• Competition increased in July although at a much slower rate (+3.5%) that continues to illustrate a trend toward the larger companies surviving best in this environment.
• Despite just 4 of the top 10 lenders increasing volume from June, the top 10 as a group grew faster than the overall market, up 15.1%.  Triple digit jumps from Wells Fargo and Metlife led the way, with Genworth continuing its recent growth streak by almost doubling for the second month in a row.
• In spite of the continuing lower volume levels the industry is actually approaching a 2 year high in average monthly endorsements per lender, due entirely to the drastic reduction in competitors.
• Among the 81 markets tracked here, several large cities stand out for having the highest monthly productivity figures per lender (endorsements per lender): Houston, New York and San Francisco each are among the top markets year to date. Of course, if you can overcome the regulatory/licensing restrictions in North Carolina or the Caribbean, Greensboro and Puerto Rico are both off the charts…

We don’t talk too much about our paid client services in this space since we know most readers are just looking for a quick (free) update on the reverse mortgage market.  For those of you who are looking to identify the top zip codes in your territory to target your marketing (seminars, mail, etc.), head over to our Retail & Brokers page to check out a new service we’re offering for just $20 per month: Sales Territory Scorecard.

Just tell us where you do business and start targeting your efforts where your sales and marketing efforts are most productive.

The full report is available by clicking the image below. Enjoy!