Posts Tagged ‘Wells Fargo’
As we wind down the summer with Labor Day in the rear view mirror, it’s perhaps only fitting that the rest of the year is coming into view. If July’s numbers are any indication of what’s to come, the long rumored shift in business momentum toward large institutional shops and away from small brokers appears to be well under way.
Both Retail and Broker/Wholesale volumes were up in July (albeit off the pace of a furious bounce back in June), but the contrast couldn’t be clearer: Retail growth was more than 3x as fast as Broker/Wholesale, further widening the lead Retail only recently gained in total volume.
Among lenders, there’s a very interesting divergence happening as well. From a combined Retail/Wholesale perspective, many of the top 10 lenders are under-performing the industry’s growth rate since the May low point, but 3 lenders are striking exceptions:
- Genworth is up 228% to 581 units, with much of the growth coming from Wholesale
- Metlife is up 85% to 1,062 units
- Wells Fargo is up 37% to 1,460 units
Doing some quick math, it’s clear that these three lenders alone accounted for 97% of the increase in units from May to June for the entire industry. That’s perhaps the best example we’ve ever seen of a very narrow recovery in volume, which begs the question why these three are succeeding so much more than the rest of the industry together.
These are large institutions but there are other large institutions here that did not see similar growth, and 1 of the 3 isn’t an HMBS issuer so that argument has holes too. We don’t have an answer to this riddle for you this month, but for now we’re content to simply live in interesting times and hope someone does a case study someday.
Be sure to click the link below to access the full report:
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!
Below you’ll find the Wholesale Leaders report with data updated through November 2009.
Wholesale volume dropped almost 17% from October, to 3,901 endorsements. This brings the YTD wholesale volume to 54,609 units, a 6.4% decline from 2008 levels, but we’ll still end the year with the second highest wholesale volume on record. Unfortunately, if the current application trends continue into 2010, there is a decent chance that wholesale volume could slip back to the levels of 2006 (which would mean wholesale volume around 40,000 units). Of course this is not something we all want to hear, but if you are not at least considering this possibility in your plans for 2010 and ready to take the appropriate actions, you may be in for a surprise, and not the pleasant kind.
As a wholesale lender, one way to buffer the potential drop in volume in the next year is to focus on your existing customers and do what you can to win more of their business. If you look at the table at the bottom of page 2, Wells Fargo is currently doing the best job of that (currently capturing 40% of their brokers’ volume), followed by Financial Freedom and Bank of America at 35%. Of course, that only tells part of the story, and the volume Wells does on the wholesale side should indicate that most of their clients are in the smaller volume group – Metlife, Bank of America, and Generation all have fewer customers with a lower capture rate, but do far larger amounts of volume in the wholesale market.
As a vendor to the reverse mortgage industry, the challenges and the opportunities are very similar to those the wholesale lenders face. Understanding which lenders you are missing out on and where they are doing business are both key to growing your market share. If a decline in volume is in the cards, the only way to keep above water is to win more business, both from your current customers as well as those you are completely missing. We have tools available to help you do just that – don’t hesitate to contact us if you want to learn more.
Click here or on the graphic below for this month’s report.
