Posts Tagged ‘reverse mortgage wholesale’
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:
Now that we know November’s endorsement totals weren’t as scary as they could have been, it puts October’s reports in a different light. We reported in last month’s HECM Lenders that October endorsements were down -16.8%, owing primarily to Wells Fargo’s first big monthly decline.
Now that we have details available to report, it’s perhaps even more interesting that the broker/wholesale channel still declined faster than retail/direct, even though Wells Fargo’s decline was almost entirely felt on the retail side (Wells was 93% retail). Wholesale declined -18.3% vs. -16.1% for Retail, marking the fifth consecutive month of under-performance.
It’s logical then, to assume that other retail lenders did better in October than brokers in aggregate, and page 4 of our report makes it clear how each of the top 100 fared (although the list doesn’t distinguish retail lenders vs. brokers). A few notables:
- American Advisors Group (#4) was up 49.3% in the month (and 132.5% year to date) – Retail
- New Day Financial (#11) was up 34% – Retail
- Great Oak Lending (#17) was up 34.8% – Retail
- Open Mortgage (#23) was up 25% – Broker
Click the image below to access the full report:
This is the first issue of the HECM Originators report, which takes the place of “Wholesale Leaders” for rankings of retail and TPO/broker/wholesale business.
July summary
July endorsements showed a continued trend of better results for retail/direct lenders compared to wholesale/brokered volumes, with Retail declining -5.2% while Wholesale shrank -7.0%. We also saw the gap between the two channels remain fairly small, as the past four months (April to present) have shown Wholesale consistently within 3% of overall industry growth rate each month. In the 8 months prior to April, we only saw that gap under 3% once and one month was as high as 13.6%.
Bottom line, the industry has basically finished the transition to the TPO world and further changes in volume will be related to other factors like lender exits and other events more than the past regulatory changes.
Report Updates – Rankings Description
For long time readers of our reports, you’ll notice the biggest change in our reports is the addition of page 4. We previously provided rankings of top HECM origination companies through our Retail Leaders report, but as FHA is no longer approving brokers, two things happened on that report: companies that are not FHA approved can no longer see their volume ranked against their peers there, and wholesalers can no longer see which of their clients and potential clients are originating HECM in volume.
That change has made the rankings on page 3 of this report which display lender volume by business channel (retail vs. broker) the single best source for ranking origination companies. But it also means the longest running report in our industry (FHA’s HECM MIC report that appears faithfully on the 1st of each month) no longer serves the purpose of broker companies.
We invite you to review the new page 4 on our HECM Originators report which replaces the basic functionality of the old FHA report by showing the single month volume rankings of the top 100 origination companies, but we also added to it by showing calendar year to date totals and rankings for each company along with monthly and YTD growth rates.
Housekeeping Notes:
- The Retail Leaders report has been re-named “HECM Lenders” to identify it as a ranking of FHA approved lenders closing HECM loans and includes both retail and TPO business for these lenders. The report will continue to be published during the first week of each month.
- Industry Trends has been re-named “HECM Trends” in keeping with the above changes. First report will be issued week of 9/19 and during the third week of each month thereafter.
Click the image below to access the full report:
