Posts Tagged ‘Metlife’
We’re a few days behind our usual schedule as we enjoyed a quick trip out to Dallas for Reverse Mortgage Day in Texas. As always, it was very well organized and if you were busy networking in the halls or didn’t attend, you can find our presentation on current trends in the reverse mortgage space here.
July saw another double digit increase in HECM endorsement volumes over June, up 11.3% to 5,901 loans. Still well off last year’s pace, but gaining traction as the application volume increases indicated a few months back.
- July’s strength was broad based, with the 8 higher volume regions all showing increases and only Rocky Mountain and Great Plains declining. Both of the decliners have consistently been the smallest volume regions anyway, so they didn’t slow the overall industry growth significantly.
- Competition increased in July although at a much slower rate (+3.5%) that continues to illustrate a trend toward the larger companies surviving best in this environment.
- Despite just 4 of the top 10 lenders increasing volume from June, the top 10 as a group grew faster than the overall market, up 15.1%. Triple digit jumps from Wells Fargo and Metlife led the way, with Genworth continuing its recent growth streak by almost doubling for the second month in a row.
- In spite of the continuing lower volume levels the industry is actually approaching a 2 year high in average monthly endorsements per lender, due entirely to the drastic reduction in competitors.
- Among the 81 markets tracked here, several large cities stand out for having the highest monthly productivity figures per lender (endorsements per lender): Houston, New York and San Francisco each are among the top markets year to date. Of course, if you can overcome the regulatory/licensing restrictions in North Carolina or the Caribbean, Greensboro and Puerto Rico are both off the charts…
We don’t talk too much about our paid client services in this space since we know most readers are just looking for a quick (free) update on the reverse mortgage market. For those of you who are looking to identify the top zip codes in your territory to target your marketing (seminars, mail, etc.), head over to our Retail & Brokers page to check out a new service we’re offering for just $20 per month: Sales Territory Scorecard.
Just tell us where you do business and start targeting your efforts where your sales and marketing efforts are most productive.
The full report is available by clicking the image below. Enjoy!
May’s volume was notable for being the lowest on record for 5 years, but the difference between broker/wholesale volume and retail/direct was just as stark. For the fourth consecutive month now, brokers bore the brunt of declining volumes, down -25.8% vs. an -8.4% decline for retail. If nothing else it shows the continuing impact of smaller originators getting washed out by lower industry volumes and new licensing requirements.
As we suspected in last month’s report, we did indeed see retail units surpass wholesale units in May, with 54% of volume coming from retail/direct originations. Given that the downtrend the past 6 months has unambiguously hurt broker/wholesale volume more than retail, we’ll be looking closely to see if the increased volume in June (and hopefully the next few months as well) continues to favor retail or swings back in favor of brokers.
So where are lenders placing their bets? One way to look at it is with the fastest growing lenders in both retail and wholesale:
- Of the 5 fastest growing retail lenders, only one (Metlife) also has wholesale business, although they do happen to be the number 1 wholesaler
- Of the 5 fastest growing wholesale lenders, all five have retail originations as well, although none has more than 23% of business from retail
- Also of note, 2 of the largest wholesale lenders with the longest track record in the space, Bank of America and Financial Freedom, are flat and down -60% respectively in wholesale volume
In many ways today’s report illustrates what has long been considered a truism in the mortgage industry: wholesale is much faster to grow, but retail is where companies create lasting franchise value. We’re all in favor of a healthy industry with both retail and wholesale channels, but the trends right now are increasingly showing strain in the broker/wholesale side of the industry.
Be sure to click the link below to access the full report:
For the third straight month now, wholesale/broker endorsements shrank more than retail/direct endorsement volumes. In April, brokers saw 7.4% less volume while retail lenders shrank by 3.3%. Given what we already know about May’s low volume levels, we expect we’ll still be talking about declines in both business channels next month as well.
Brokers still hold a slight edge in total volume over the retail channel, but the gap is closing each month and could easily flip the other direction at any time with how close we are now. Large lenders continue to dominate the volume totals, accounting for 88.9% of volume in April. This is up a minor amount from March, continuing above trend for past 12 months.
We’ve heard a lot about licensing and testing requirements at non-bank originators driving many loan officers to move to national banks to escape these burdens, but at least so far we haven’t seen it affect volumes in the industry.
- Of the top 10 lenders, only 3 have grown retail volume in the last 12 months and 2 of those are non-banks: Generation and One Reverse
- The strongest retail grower over the same period is Metlife (national bank), which continues to grow strongly in both retail and wholesale channels, up 82% and 102%, respectively
- Looking at the fastest growing retail/direct lenders, 4 of the top 5 are non-banks – New Day, Guardian First, and Cooper and Shein (in addition to One Reverse above)
It’s still very early to close the book on this, but at the very least the incremental benefits bank originators should see from licensing requirements is getting muddled among the many other factors affecting retail volumes.
Be sure to click the link below to access the full report:
