ReverseIQ Newsletters

Wholesale Leaders – August 2009

Summer is gone and apparently the reverse mortgage market cooled down a bit early as well. We already knew that total industry activity was down 9.2% in August from July from the Retail Leaders report, but what we didn’t know is that the weakness was almost entirely in the direct lender side of the business rather than wholesale/broker volumes. This is somewhat against the trend we’ve seen so far this year, but given all the recent news out of FHA regarding broker approval process changes and net worth requirements increasing, perhaps this is will be a one month trend (would that be a trend or a point?).

Enough with our word play, there are a few interesting points to note in this month’s report. Highlights:

• Leading off with some good news, we can welcome Financial Freedom back to the 4 digit club for the first time in a while, as they recovered from what was probably a misleadingly low June performance (369 loans) to 1,151 in August
• As the financial services industry continues to consolidate in spite of all the hand-wringing about ‘too big too fail’, our little corner of the world saw some of the same trends despite the increased broker activity noted above. For the first time since April, we had 4 separate lenders each with over 1,000 loans in August. We just missed having 5 lenders in the club for just the second time ever (Dec 2008), as Genworth’s recent product additions and wholesale sales force investments are bearing fruit – 934 total loans in August
• It’s no surprise to anyone who’s been reading this column that Metlife is the fastest growing wholesale lender in the past twelve months, but what might be more surprising is Generation, Genworth and Urban close behind at 2-4, respectively. Seems Sherry and Bob won’t ever tire of competing with each other, and I’m sure there are plenty of brokers out there happy to be benefiting from the friendly rivalry!
• And in case anyone doubts the power of distribution and brand in the retail side of this business, Bank of America is proving every day that bank branches are a superb source of reverse mortgage business. Not only is BofA the fastest growing retail lender in the country, they’re growing more than twice as fast as the runner up.
• That being said, the second fastest growing retail lender is proof that bank branches are not the only way to do business. One Reverse Mortgage is taking the direct to consumer approach and thriving.

Click the report link below for full details.

Wholesale Leaders – July 2009

Our Wholesale Leaders report is now available for July, 2009. Wholesale made up 5,392 of the 9,828 units done in July, bringing the YTD number to 35,204. Financial Freedom remains the top wholesale lender for the trailing twelve months, but it’s close. MetLife continues its short-term run, however, and has held on to the top spot for the last two months.

The following tables show how different the landscape looks on a current month vs. trailing twelve month basis. Metlife has certainly seen quite a bit of lift from being the first to offer the 5.56% fixed rate loan, and WAF was right behind with their 5.63% offering. Given the commodity nature of this business, we have seen others begin offering the same rates lately, so it’ll certainly make for more changes in these lists going forward.

Top 10 – Trailing Twelve Months

Top 10 – Month of July, 2009

If nothing else, the stark difference between these two lists should point out that you really should be looking at the most timely information possible to run your wholesale business.  We humbly suggest our Wholesale Analytics Reporting service is the tool you’re seeking.

Continuing Trends

Other top gaining Wholesale Leaders include Generation Mortgage, Urban Financial and Genworth Financial, all more than tripling their Wholesale volume over the past year.  The turmoil in the Wholesale side of the business has been much commented all around our industry, but these numbers certainly drive home the changing realities as opportunitistic competitors pick up business while some of the historical leaders struggle.

Check the report below for more details and don’t be afraid to drop us a line if you’d like to compare notes on what this might mean for your business.

Wholesale Leaders – June 2009

Wholesale has had a tough couple of months, but looks like June was a little happier in the broker/wholesaler world.  After last month’s 20% drop, wholesale volume picked up a bit in June, growing just north of 8% to 4,623 units, with trailing 12 month volume coming in at 60,448.

There is a new #1 in the wholesale world this month – Metlife. (We like to think it’s because they use our Wholesale Analytics Report to help manage their wholesale business.) With 919 wholesale units, Metlife was far above #2 World Alliance (745) and #3 Bank of America (697). Though its not at the Freedom or JB Nutter levels of the past (yet?), it’s still an accomplishment worth mentioning.

The question, of course, is how did they do it?   It’s no secret that they have a very nice fixed rate product offering that is winning over lots of business and that’s leading to many successes in volume and capture rate.

Beyond sheer volume, we like to focus on things like customer capture – defined as the percentage of loans your brokers do through your company. If you look at the bottom left of page 2 on this report, you’ll see Metlife’s customer capture was 28% — not very impressive compared to JB Nutter or Financial Freedom (44% and 38%, respectively). But that’s a trailing 12 month look. If we look at the trailing 3 months, Metlife came in at 40%, and in the most recent month, their capture hit 49%.

While this doesn’t tell the whole story, it’s certainly one of the key components to their recent success. If you are a wholesale lender, one thing you should focus on is earning more of your customers’ business. (In fact, we strongly believe that this metric is one of the 3 key measures to base bonus pay structure on – think of it as the customer loyalty/happiness thermometer. Contact us for more information.)