Posts Tagged ‘HECM averages’
It’s been a while since we wrote about a hot HECM market bucking the national downtrend, but this month we have a very interesting one for you. As you might have guessed by the title of this report, we’re talking about Saint George, Utah. The city has more than doubled total Max Claim dollars year to date, and at 100 loans with two more months to go is on track to easily surpass its prior loans record of 104, set in 2007.
We’ve previously written about Baltimore, New Orleans, Philadelphia, and North Carolina, but as the housing bust has progressed there have been fewer growth stories to find. Saint George caught our eye as it rose to the top of our listing of cities by MCA growth on page 2 (bottom), finally taking the crown from Philadelphia.
Our first guess was that this might be another refinance driven surge as we saw in Baltimore and Philadelphia, but there hasn’t been a single HECM to HECM refinance yet in 2011 for the city. That of course got us even more curious, so we started looking at lenders – and hit the jackpot.
Cherry Creek Mortgage has created substantial business in Saint George as a new industry participant, in a place where the rest of the industry put together is essentially following the national volume trend. There are lots of ways to interpret the company’s success, and we won’t pretend to know their secret sauce. But we’ll hazard a couple of thoughts:
- Small, under-penetrated industries like ours still have niche opportunities that have not been fully understood nor harnessed by existing competitors
- Single companies with an innovative approach to the customer, product and/or market can change the shape of the industry in a city, state or even nationally
- Our industry is well served by new competitors that thoughtfully pursue new strategies
Congrats to Dan and the rest of the team on an amazing success story.
Click on the image below to view the full HECM Trends report for this month.
HECM endorsements were down -3.8% in September, and TPO/Wholesale fared worse than Retail/direct volumes. If we put that together with what we already know about Wells and BofA exiting and where theirvolumes are by state, what can we expect in the next few months?
A big part of that story can be found in applications per business day, which since April have been trending down compared to last year.
When comparing applications to endorsements (and ignoring the distortion from last September’s application rush ahead of PL reductions), we should expect a continued decline in endorsements year over year given the pattern of applications thus far.
Against this national trend lower, we continue to see some states and cities buck the trend:
- North Carolina continues to perform well, while New Jersey, New York and Texas are all up modestly year to date
- Among counties, Philadelphia, Nassau and Suffolk in NY, and San Diego and Orange in CA are all benefiting this year
- Philadelpia, San Antonio and San Diego are all up double digits among cities from last year
Click on the image below to view the full HECM Trends report for this month.
Last month we looked at state growth rates since 2007 and found North Carolina looking rosy with Texas holding its own. This month we’ll examine how lender exits have changed the landscape from a state perspective.
We looked at endorsement volumes from October 2010 through March 2011 (the last 2 quarters where Wells, BofA and FF were fully represented) to see how much market share the three collectively had by state. Top 10 states by total volume and national total are in the table below, displaying endorsements and market share from the three exiting lenders.
The results were logical, but surprising for their size. With California continuing to have the most HECM volume, the fact that exiting lenders held almost 50% market share means a huge amount of volume is potentially available. Also among the top 10 states, NC and NJ were above 50% market share.
It’s a huge opportunity for the remaining lenders and one that hasn’t been lost as the aggressive push to hire loan officers from these companies has mostly abated. That’s certainly the most straight-forward strategy, but there is likely to be significant volume still up for grabs in several of these states for those that know where to look.
From an industry perspective, it also means we should expect some of these states (especially NC) to have volumes decline more due to these market share concentrations. The combination of restrictive regulations and large market share for departing lenders means big opportunity for lenders that can do business in NC, but also adds up to opportunity lost for consumers and the industry if there aren’t enough lenders available to serve that 62%.
If you’ll be in Boston for NRMLA’s Annual Convention, don’t miss the HECM by the Numbers panel. We’ll be speaking more on this topic and Purchase/Saver opportunities, currently scheduled for Monday, Oct 24 @ 1 pm.
Click on the image below to view the full HECM Trends report for this month.
