Posts Tagged ‘reverse mortgage stats’
Surviving and thriving in the reverse mortgage industry these past few years has required adaptation and flexibility:
- Where ARMs once dominated the landscape (all at a single margin of 150 on the same CMT index no less!) fixed rate HECMs have been 2/3 or more of volume for over 2 years. That change happened in less than 6 months.
- Where this business was once powered by “kitchen table” salespeople at Wells Fargo, Bank of America, Metlife and Financial Freedom, we saw 2 of the top 3 lenders in March (page 4) were independent reverse mortgage lenders exclusively originating through their call centers.
- Where there previously was one HECM (Standard) focused on one customer niche (immediate cash), we now have two more HECM products that better suit financial planning (Saver) and home purchases (Purchase).
Beyond the shifts mentioned above everyone has had to adjust to an industry with fewer loans in the past few years, even if many companies are doing better than ever. That volume shift became most apparent to us this month when we noticed our top 10 zip code rankings were only returning 6 entries.
To make a long story short, we realized we had restricted the rankings to only zip codes averaging 5 or more loans per month. This made sense a few years back when there were several hundred zip codes each month with this level of volume but that list was down to 24 in March and most of these were lower Jan-Feb resulting in just the 6 zip codes with 5+ on average in Q1.
This volume decline is not groundbreaking news to anyone since we’ve been reporting on it for years now, but it does highlight the need for everyone to adapt. The report below has some great information to follow the industry nationally and we’re happy to provide it if that’s all you need.
If you would like to see local statistics that can help you work smarter and target your sales and marketing efforts for optimum results, this week is a great time to learn more in person. Schedule some time to sit down with us at NRMLA Irvine this week, or just give us a call if you’re not planning to attend.
Click on the image below to view the full HECM Trends report for this month.
March was the lowest month in recent memory for HECM endorsements, down -19.3% to 4,374 loans. We have to go all the way back to September of 2005 to find a month with lower volume.
Broker/TPO channel business declined dramatically, dropping -26.6% compared to -12.8% for retail/direct. This relative performance gap has swung both ways in recent months, but retail continues to comprise 55-60% of all volume.
Given that we’ve seen industry volume numbers decline while individual lenders grow volume, there is more attention than ever being paid to lender rankings. We’ve heard many lenders targeting a top 10 ranking in the wake of big lender exits – in the past 12 months any lender averaging 100 loans per month or more made the cut. For Q1 the bar was even lower, down to 65 loans per month.
If you’d like to hear more about how our sales and marketing tools can help you get there, drop us a line to schedule a call or better yet, a meeting next week at NRMLA Irvine.
Click the image below to see the full report, including rankings of all HECM originators including TPOs:
The past few days have been dominated by Metlife’s exit announcement, but regardless of how you feel about that news the impact on industry numbers simply hasn’t been felt yet. We mean that in the best possible way, as April endorsements rose 4.9% to 4,595 loans after the horrible, no good, very bad month in March (apologies to one of our favorite children’s books).
From a regional perspective it was an even 5 up, 5 down month, with the two biggest regions (Southeast/Caribbean and Pacific/Hawaii) both snapping back to February levels.
March case numbers issued also had a bit of good news for us, rising 4.1% from Feb to 7,075. Oddly enough Feb-Apr all have the same number of business days, so it’s a clean comparison to see business trends this time of year.
We aren’t going to weigh in on the Metlife news/rumor mill – we’ll stick with the likely volume implications in coming months based on what we’ve seen happen in last year’s lender exits. Barring any immediate big announcements we can expect May and June case numbers issued to drop 11-15% as loan officers close out their pipelines without taking new applications. After that, the best case scenarios for industry volume might see an additional 1-2 months of transition during hiring/training/licensing/marketing ramp up at a new firm.
The less optimistic scenarios would just extend those timelines out and/or show a number of loan officers leaving the industry, both of which would push application and endorsement expectations lower.
Pretty much any way you slice it, we should all be expecting <60,000 endorsements for calendar year 2012. Taking the under was already a slightly better bet before Metlife’s announcement, so from here the pessimistic scenario would land us at just over 55K loans. That assumes no new case numbers post 4/30 from the Metlife retail team and a stable level per business day from all other companies. Lots of other better scenarios are possible, but very unlikely for any of them to produce 60K or more endorsements in 2012.
Click on the image below for this month’s report.
