Posts Tagged ‘Genworth’
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:
The first month of 2011 brought us back to a familiar theme from last year as broker/wholesale endorsements outpaced retail in a down month for the industry overall. We saw this pattern several times last year, particularly as the industry volume growth tapered off in September and October.
- 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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August wholesale results are in, and as we’ve seen in past months, Retail/Direct lending in the reverse mortgage market continues to lead Wholesale/Broker volumes. Total volume for August was up 13%, with Retail/Direct up 18% and Wholesale/Broker up just 6%.
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%.
Be sure to click the link below to access the full report:
