Posts Tagged ‘HECM For Purchase’
HECM Trends is the last report we put out each month, and it provides an interesting context for the rankings and national industry volume figures we focus on in HECM Lenders and HECM Originators. In last month’s edition, we illustrated how different trends look all the way down to zip codes, noting similarities between many of the top 10 zips around the country.
This month, we thought it would be interesting to focus on something we first noticed years ago. Looking at page 2 of this month’s report, you’ll find our list of the top 10 cities in the country ranked by penetration. Penetration in this context simply means the percentage of 62+ homeowner households in an area that currently have a reverse mortgage.
Looking at the top 3, we see Opa Locka and Hialeah, both outside Miami, FL, and Compton, CA which is in the southern part of Los Angeles County. Most of us have probably heard of at least one of these cities, but after looking up their demographics, it’s notable that they all have over 70% of their population as Hispanic/Latino and African American. The per capita income is also more than 40% below state averages in all three, suggesting a lower income minority demographic as the typical household in each.
Given that we’re just looking at statistics rather than specific loans we’re not going to get into any regulatory questions, but have you ever wondered what opportunities you miss because your marketing message and sales approach doesn’t speak directly to different segments of the market?
These cities wouldn’t be ranked so high if some companies weren’t originating a lot of loans here, but it’s hard to imagine the same marketing campaign working in these cities and Saint George, UT, for example (ranked top in the MCA growth table at bottom of same page). If you’re not tailoring your approach for different areas and customer segments, why not?
Check out the full report below by clicking on the image and learn more about what works in reverse.
As the reverse mortgage industry fights through a wave of major lender exits, HECM Trends identifies bright(er) spots within the overall industry volume decline. In the theme of “location, location, location”, we’re focusing this month on zip codes with the most HECM volume year to date.
While Utah has the top zip code in the country averaging 13 loans per month (proof that our continuing belief in HECM Purchase niche plays is more than just hot air), the remaining 9 are all on the east coast (or beyond in the case of our 3 Puerto Rico zips). That’s pretty unusual by itself, but what’s also driven home is where these zip codes are located – the other 9 are right on the outskirts of major eastern cities.
- Both 11203 and 11434 (9 and 10) on the outskirts of NYC near JFK airport
- 6-8 ranks are all suburbs of San Juan, Puerto Rico (get an expense account for travel and some loans too!)
- 3 and 5 are both suburbs of Washington DC on the Maryland side
- 4 is a suburb of Philadelphia on the PA side
- 2 is a suburb of Orlando in Florida
We don’t point this out because it’s earth shattering (HECMs happen where seniors live), but rather because the presence of such volumes in single zip codes and clusters of zip codes shows how important it is to know where to spend your time and money to generate loans. If you’re marketing in Manhattan you might get a few loans, but would probably get a lot more by focusing in specific parts of Queens or Brooklyn (or even just specific areas of Manhattan!). The same goes for the city you call home.
If you’re not checking where HECMs are happening in volume as part of your marketing plan, you’re missing a big opportunity to get more bang for your marketing bucks.
Check out the full report below by clicking on the image and give us a call if you want more information about your local area.
We’ve been talking the past few months about a few specific markets around the country that have weathered the storm of decreased volume, most notably Baltimore. Rather than beat the Baltimore drum another month, let’s talk about a slightly different topic that caught our interest this past month.
We’ve been underwhelmed by the volume (or lack thereof) of HECMs for home purchase since the program’s introduction but we think it’s time to look a little closer at what’s happened thus far. But while the total has been uninspiring, the trend is definitely headed in the right direction.
Take a look at the chart below for an illustration how this tiny niche of the HECM market grew over the course of 2010.
The market grew nicely over the year even as principal limits were reduced in October, although it’s very early to tell whether HECM Purchase is more or less affected by those changes. Another interesting way to look at the volume is to see where the product is doing well geographically, as illustrated below.
It’s perhaps no surprise to see some of the leading HECM states in CA and FL take charge here as well, but if you’re doing business in either of these states perhaps these charts can help you point out the value of HECM Purchase to your business network. HECMs assisted in closing over 1,200 home sale transactions last year for almost $325 million in home value.
It’s a small number today, but it points the way toward incremental growth both for our own senior market and for real estate business partners.
Click on the image below to view the full Industry Trends report for this month.