Posts Tagged ‘Metlife’
September HECM endorsement numbers were down -3.7% from last month to 5,590. The number of active lenders continues to decline but has started to bottom out in the low 200′s per month, so we’ve likely seen most of the impact from FHA’s lender approval changes already baked into these numbers.
While we continue to trend lower than last year on the volume side for the third straight month, what’s starting to emerge from the monthly numbers is the sense of clear winners from the exit of BofA (Wells hasn’t really affected these numbers yet). On the list of winners, Metlife, Genworth and Security One come out near the top given their dramatic jumps since the first quarter.
Regionally, 7 of the 10 regions increased in September in contrast to the overall down month nationally. As we commented upon previously, the highest volume markets lagged: the bottom 6 regions increased 118 units while the top 4 dropped 335, even after accounting for a small increase in Pacific/Hawaii.
- Northwest/Alaska had the largest unit volume increase, up 33 units or 12.0%
- Rocky Mountain had a slightly higher percentage increase, up 12.6% or 29 units
Click on the image below for this month’s report.
Another month is in the books, and while volumes continue to be less than stellar, we’re getting a better picture of what the major lender exits portend for our future volumes. We can officially mark June as the month that BofA left the building from an endorsement perspective, given the decline from 896 retail endorsements in April to just 7 in June. We’ll dive into more detail next week, but perhaps as much as half of last month’s industry volume decline could reasonably be attributed to BofA. June could have been a 1,000 loan improvement from May absent BofA’s exit, but that’s only good for context.
We have another shoe dropping when it comes to analysis of these industry numbers given Wells Fargo’s 6/30 exit has yet to be baked in to any of the application or endorsement numbers we’ve seen yet, but we think the title of our post is appropriate given what the remaining lenders in our industry are experiencing.
Out of the 8 largest lenders not named BofA or Wells, just one declined in June. Looking at them collectively, these 8 lenders experienced a 37.9% increase in volumes from April to June, while the industry total declined -4.4% over that same period. Metlife appears at this point to be the biggest grower since the BofA exit, joining the 1,000 loan club this month for the first time.
Compared to the impact of HUD’s changes to the HECM program in October 2009, it’s very clear which had a larger impact on the industry. If anything, this highlights the importance of HUD’s pending news on financial assessment of borrowers and policy for T&I defaults.
Looking regionally, we saw improvement in all 10 regions tracked with Mid-Atlantic and Southwest seeing particularly strong growth from last month. From a year to date perspective, many areas continue to see growth:
- New York/New Jersey continues to ride the Q1 surge to show 15.9% growth from last year. Delaware and upstate New York have grown more than 25%, including both Albany and Buffalo.
- Great Plains, Southwest and Rocky Mountain are growing at double digit rates
- Midwest, New England and Northwest/Alaska are declining so far this year
- Detroit, Miami and Chicago have been the biggest decliners at the market level, all off by more than 25%
A bit of housekeeping: As HUD changes their data reporting in the wake of broker licensing changes, please note that brokers not closing loans in their own name are rolling off the active lender list over the next few months. As such, we will not be emphasizing active lender counts and changes until this stabilizes, likely toward year end. After that transition is complete, Retail Leaders will reflect the number of lenders closing HECMs in their own name. For a report including brokered loan activity attributed to the broker, please see our Wholesale Leaders reports.
Click on the image below for this month’s report.
TPO loan volume continued to grow in April, but wasn’t enough to keep wholesale endorsements from declining -13.3%. Retail fell further, down -18%, and the balance between the two channels will be an indication going forward to see if TPO volume is growing the business as non-FHA approved brokers jump in or just migrating FHA brokers to TPO producers.
Last month we showed a chart that illustrated the impressive growth of TPO loans and the clear lead of a few sponsors in this channel. The updated chart shows continued growth as TPO loans made up 30% of all wholesale loans in April, and also the more competitive nature of the business as many sponsors raced to catch up.
Metlife ran out to a big lead in March but grew slower in April, while Urban, Genworth, Generation, BofA and Security One all grew significantly to more than double TPO business from 360 to 735 loans. We’re hoping in the future to analyze just how much TPO business is coming from originators new to the industry, but for now it’s clear that the sponsor side is becoming a much more competitive market.
This month’s report also raises a point in the discussion about industry consolidation, as the table on top of page 2 illustrates that some of the largest lenders declined much faster than the industry in April. We don’t put too much weight in any one month’s results, but it’s startling to see that 88% of the industry’s decline this month came from just 2 lenders: Wells Fargo and Metlife.
The 2 lenders were 44% of the industry in March, so their decline is far larger than their market share. The smallest originators didn’t catch a break though: top 10 lenders Urban and One Reverse both saw 12 month highs and Security One came in just one loan shy of their recent peak.
Click the image below to access the full report:
