Posts Tagged ‘hecm’
We’re getting closer and closer to the final reports of 2011, so we’ll preface next month’s numbers by showing one of the biggest trends of the past 3 years: Lender consolidation.
One of the questions we hear a lot is whether having more lenders is good or bad for the industry. Of course, most people dodge by saying that more of the right type of lenders is a good thing, which is much easier to agree with.
We can’t prove that more or fewer lenders is the better way to go, but one thing is becoming evident over time. Whichever comes first, lower active lender totals march in lock-step with lower loan volumes.
It’s no secret that endorsements have been lower the past few years, nor that there are fewer lenders actively originating HECMs. What’s striking about the chart is just how correlated the two trends have been. The endorsements figures are easy enough to find (any of our 3 monthly reports). You can find the active lenders count including TPO (red line in chart) in the top left box on page 2 of HECM Trends each month, and the FHA approved HECM lenders (blue line) in our HECM Lenders reports.
It’s also worth pointing out that as FHA switched from approved brokers to TPOs approved by lenders (gap between red and blue lines on chart), HECM volumes stayed in line with the red line that includes TPOs. This would suggest that the active originators metric including TPOs is more representative of the health of the industry.
Click on the image below to view the full HECM Trends report for this month.
We’ve known for months that Wells Fargo’s exit would have a major impact on HECM endorsement totals, with the expectation that all else being equal Wells’ huge retail market share would impact that side of the industry more directly.
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!
Click the image below to access the full report:
Happy New Year! 2012 may yet become a fantastic year or a dismal one, but the best thing about this year is the vast potential presented by an entire year stretching out in front of us.
December finished on a modest down note, with HECM endorsements down -0.4% from November to 4,636. Active lenders increased 4.4%, although this measure of competition remains at a low level since stabilizing earlier this year.
We’ve been saying that fewer competitors yields benefits for surviving lenders for at least a year, and Metlife provided a poignant demonstration of this effect. The company’s November and December totals were its two highest endorsement figures of the year, with each month higher than the low months for Wells Fargo before their exit announcement in June.
Of the 10 regions we track, 5 were up including the 2 largest, Southeast/Caribbean and Pacific/Hawaii. And in a year when national volume fell -5.6%, it’s worth noting the winners among our market rankings:
- Jackson, MS took top growth honors, finishing up 41.3% from last year. Honorable mentions go to booming metropolis Casper, WY, up 39.4%, and Shreveport, LA, up 29.8%
- New York rose to the top market in the country with 3,133 loans, up 1.2% from 2010. The big apple swapped spots with Los Angeles, which dropped -10.7% to 2,960.
Click on the image below for this month’s report.
