Happy Landings – Retail Leaders June 2011

Another month is in the books, and while volumes continue to be less than stellar, we’re getting a better picture of what the major lender exits portend for our future volumes. We can officially mark June as the month that BofA left the building from an endorsement perspective, given the decline from 896 retail endorsements in April to just 7 in June. We’ll dive into more detail next week, but perhaps as much as half of last month’s industry volume decline could reasonably be attributed to BofA.  June could have been a 1,000 loan improvement from May absent BofA’s exit, but that’s only good for context.

We have another shoe dropping when it comes to analysis of these industry numbers given Wells Fargo’s 6/30 exit has yet to be baked in to any of the application or endorsement numbers we’ve seen yet, but we think the title of our post is appropriate given what the remaining lenders in our industry are experiencing.

Out of the 8 largest lenders not named BofA or Wells, just one declined in June. Looking at them collectively, these 8 lenders experienced a 37.9% increase in volumes from April to June, while the industry total declined -4.4% over that same period. Metlife appears at this point to be the biggest grower since the BofA exit, joining the 1,000 loan club this month for the first time.

Compared to the impact of HUD’s changes to the HECM program in October 2009, it’s very clear which had a larger impact on the industry. If anything, this highlights the importance of HUD’s pending news on financial assessment of borrowers and policy for T&I defaults.

Looking regionally, we saw improvement in all 10 regions tracked with Mid-Atlantic and Southwest seeing particularly strong growth from last month. From a year to date perspective, many areas continue to see growth:

  • New York/New Jersey continues to ride the Q1 surge to show 15.9% growth from last year. Delaware and upstate New York have grown more than 25%, including both Albany and Buffalo.
  • Great Plains, Southwest and Rocky Mountain are growing at double digit rates
  • Midwest, New England and Northwest/Alaska are declining so far this year
  • Detroit, Miami and Chicago have been the biggest decliners at the market level, all off by more than 25%

A bit of housekeeping: As HUD changes their data reporting in the wake of broker licensing changes, please note that brokers not closing loans in their own name are rolling off the active lender list over the next few months. As such, we will not be emphasizing active lender counts and changes until this stabilizes, likely toward year end. After that transition is complete, Retail Leaders will reflect the number of lenders closing HECMs in their own name.  For a report including brokered loan activity attributed to the broker, please see our Wholesale Leaders reports.

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