Back and Forth – Retail Leaders April 2011

It sometimes seems that the one thing every business has in common is that progress is never a straight line. The reverse industry has certainly had its share of detours and bumps, so it might come as no surprise that April’s endorsements were down -16.2% from last month to 6,124 loans.

That volume decline is quite a change from March, which showed the first year over year increase in endorsements in almost 2 years, although even the greatly reduced number this month was 11.1% higher than last year’s dismal showing. The one constant through it all is an unrelenting trend of declines in active lenders: down another -28.0% this month.

For now we should take this with a grain of salt, as we did see a much higher number of loans endorsed in March (360, more than 10 times the February figure) by originators that are not FHA approved (through the new sponsor rules), so the number of active lenders is understated for now. It will be interesting to see how that regulatory evolution eventually affects things, as the big spike last month suggests it has the potential to reverse the declining number of active lenders once we can fully measure the impact here. It would be even more inspiring to see volume from non-FHA approved lenders lead to a boost in overall volumes.

Perhaps even more interesting is that in spite of the volume decline causing universal drops in all 10 regions of the nation, 8 of the top 10 lenders showed increases in April. That underlines the declining competition trend, as the top 10 represented 67% of all volume in April, up from 51.4% last May.

Click on the image below for this month’s report.