The last of the HECM endorsements for 2013 are in the books! HECM endorsements dropped -10% to 4,223 loans in December, while 2013 total loans rose 15.3% to 61,122.
It’s perhaps fitting that the year in which we saw loan volume grow for the first time since 2008 but also the most significant product changes in HECM program history ended with December just barely exceeding the lowest volume month of the year (October). The year in endorsements can effectively be divided into two eras: before and after 4/1 product changes taking effect (9/30 changes have not yet affected endorsements significantly as loans could fund through 12/31 and likely affect endorsement figures substantially through February).
Given that HECM standard fixed rate loans could be funded through June 30 they continued to inflate endorsements through August. In that time frame, there was just one month (Feb) below 5,000 loans, whereas every month since has been under that threshold (and below the Feb low for good measure). It wasn’t obvious that removing the standard fixed rate product while allowing borrowers to access the same principal limits would reduce volume so significantly, but subsequent interest rate volatility and reductions in per loan revenue were enough to turn the industry trend downward.
Here’s hoping for a resumption of the uptrend in 2014, but right now application and funding volumes suggest another leg down for endorsements from 9/30 changes before any recovery will begin.
Among regions, Pacific/Hawaii outpaced all others by a wide margin at 39.2% growth from 2012, with a distant second place to Rocky Mountain at 20.7%.
- Las Vegas was the fastest growing metro by volume, up 68.7% to 329 loans and Phoenix was next at 65.3%
- Los Angeles regained its title as the highest volume metro in the country at 2,884 loans, displacing New York by virtue of growing at 25.9% compared to just 3.2% for the big apple
- All 10 regions grew from last year and 6 showed >10% increases
Several lenders had banner growth years, with 5 showing >100% growth on a base of at least 100 loans in 2012:
- American Advisors Group ranked #2 overall, up 101% to 7,413 loans and just 1.6% behind top ranked Security One/RMS
- Proficio grew 466% to 2,546 and the #6 ranking
- Open Mortgage grew 154% to 686 loans, good for the lucky #13 ranking
- High Tech Lending grew 169% to 579 loans and #18 spot
- Last but not least, Firstar Bank grew 145% to 353 loans to clinch #23
Happy New Year to all our clients and readers!
Click the image below for the full report.