ReverseIQ Newsletters

Retail Leaders – September 2009

Sometimes it seems that the more things change, the more things stay the same.  Despite tremendous changes underneath the surface this year (lending limits increased, HECM for purchase authorized, principal limit reductions, etc.) the top line in the reverse mortgage business is in a dead heat with last year’s results.  As of September, 2009 volume of 87,130 is just 0.4% lower (393 loans) than 2008 at the same point.  For those of you keeping score, the next three months need to be as good or better than September to avoid showing a negative growth rate for the year.

Of course, for those of you that just can’t adjust from the federal fiscal year to our unorthodox calendar year approach, your year is already over and we finished up 2.3% from fiscal 2008.

A few highlights of the report this month:

• Volume in September was up 6% from August, in lock step with last year’s similar increase in the same months.  For a good sense of seasonality (or lack thereof) in the reverse mortgage business, check out the Endorsement Volume chart toward the middle of page 2.
• Endorsements per lender improved after falling off a cliff last month but remains below all other months in 2009.  Good news is that both Active Lenders and New Lenders ticked down, with New Lenders continuing its downtrend since peaking in March 2008.  We haven’t seen a meaningful increase in Active Lenders (by month) since early 2008, so the declining level of New Lenders should eventually stop replacing the companies exiting the business and start declining on an overall basis.  Remember, 1/2 of the new lenders exit the business within 6 months of their first loan.
• Industry concentration increased in September for the first time since April, as the top 10 lenders collectively originated 40% of all loans last month
• Security One and OmniHome are combined in the report and jump back into the top 10 on the strength of that combination, coming in at 9th for the trailing twelve months

Click the report for full details.

Wholesale Leaders – July 2009

Our Wholesale Leaders report is now available for July, 2009. Wholesale made up 5,392 of the 9,828 units done in July, bringing the YTD number to 35,204. Financial Freedom remains the top wholesale lender for the trailing twelve months, but it’s close. MetLife continues its short-term run, however, and has held on to the top spot for the last two months.

The following tables show how different the landscape looks on a current month vs. trailing twelve month basis. Metlife has certainly seen quite a bit of lift from being the first to offer the 5.56% fixed rate loan, and WAF was right behind with their 5.63% offering. Given the commodity nature of this business, we have seen others begin offering the same rates lately, so it’ll certainly make for more changes in these lists going forward.

Top 10 – Trailing Twelve Months

Top 10 – Month of July, 2009

If nothing else, the stark difference between these two lists should point out that you really should be looking at the most timely information possible to run your wholesale business.  We humbly suggest our Wholesale Analytics Reporting service is the tool you’re seeking.

Continuing Trends

Other top gaining Wholesale Leaders include Generation Mortgage, Urban Financial and Genworth Financial, all more than tripling their Wholesale volume over the past year.  The turmoil in the Wholesale side of the business has been much commented all around our industry, but these numbers certainly drive home the changing realities as opportunitistic competitors pick up business while some of the historical leaders struggle.

Check the report below for more details and don’t be afraid to drop us a line if you’d like to compare notes on what this might mean for your business.

Wholesale Leaders – June 2009

Wholesale has had a tough couple of months, but looks like June was a little happier in the broker/wholesaler world.  After last month’s 20% drop, wholesale volume picked up a bit in June, growing just north of 8% to 4,623 units, with trailing 12 month volume coming in at 60,448.

There is a new #1 in the wholesale world this month – Metlife. (We like to think it’s because they use our Wholesale Analytics Report to help manage their wholesale business.) With 919 wholesale units, Metlife was far above #2 World Alliance (745) and #3 Bank of America (697). Though its not at the Freedom or JB Nutter levels of the past (yet?), it’s still an accomplishment worth mentioning.

The question, of course, is how did they do it?   It’s no secret that they have a very nice fixed rate product offering that is winning over lots of business and that’s leading to many successes in volume and capture rate.

Beyond sheer volume, we like to focus on things like customer capture – defined as the percentage of loans your brokers do through your company. If you look at the bottom left of page 2 on this report, you’ll see Metlife’s customer capture was 28% — not very impressive compared to JB Nutter or Financial Freedom (44% and 38%, respectively). But that’s a trailing 12 month look. If we look at the trailing 3 months, Metlife came in at 40%, and in the most recent month, their capture hit 49%.

While this doesn’t tell the whole story, it’s certainly one of the key components to their recent success. If you are a wholesale lender, one thing you should focus on is earning more of your customers’ business. (In fact, we strongly believe that this metric is one of the 3 key measures to base bonus pay structure on – think of it as the customer loyalty/happiness thermometer. Contact us for more information.)