Industry Trends – February 2010

Last month we took a close look at the Baltimore area, highlighting the good performance seen in the city and county relative to what the rest of the country is experiencing on average. This month we thought we’d take a little deeper dive into the numbers, just to see what is really driving the volume.

There is one word that sums up the entire outperformance of the area: refi. Despite the falling home values of the past couple of years, Baltimore seems to be a hotbed for refi activity. Of the 315 endorsements done in January and February, 141 units (45%) were refinances of existing reverse mortgages. For the companies we highlighted last month, the refi business mix was even higher, with Cooper and Shein (Great Oak Lending) doing 61% refi, and Net Equity Financial hitting 67%.

If we expand the analysis to include all of Maryland, the statistics are similar: 212 of 733 endorsements, or 29%, are refinances for the industry as a whole. For Cooper and Shein, its 75 of 128 units (59%); Net Equity Financial is 71 of 104, or 68%. This is a trend thats been in the works since the early portion of 2009, as evidenced by the chart below.

Maryland Market Trends

For comparison purposes, we’ve included the top 25 national retailer’s volume and business mix of refi below. One thing that sticks out to us is that of the top 10 lenders, only Financial Freedom has any real focus on the refi business, and this makes some sense given the size and age of their servicing portfolio. Where it gets interesting is when we get to the bottom half or so, and we see Net Equity, Cooper and Shein, and Evofi One (with a whopping 86% of their business refi!). We’ve seen this song and dance before, and the lenders that make a living on the refi business often pop and drop out of sight before too long. Hopefully it turns out different this time around, but time will tell.

Company Total Refi %Refi
WELLS FARGO BANK NA 2559 230 9%
BANK OF AMERICA NA CHARLOTTE 1214 44 4%
METLIFE BANK 382 13 3%
ONE REVERSE MORTGAGE LLC 324 2 1%
GENERATION MORTGAGE COMPANY 323 4 1%
FINANCIAL FREEDOM ACQUISITION 305 88 29%
URBAN FINANCIAL GROUP 301 15 5%
GUARDIAN FIRST FUNDING GROUP LLC 240 7 3%
1ST AA REVERSE MORTGAGE INC 229 3 1%
NEW DAY FINANCIAL LLC 203 1 0%
NET EQUITY FINANCIAL INC 173 123 71%
COOPER AND SHEIN LLC 152 89 59%
FIRST MARINER BANK 143 10 7%
SECURITY ONE LENDING 129 20 16%
EQUIPOINT FINANCIAL NETWORK INC 99 3 3%
BRIAN A COLE & ASSOCIATES LTD 97 1 1%
AMERICAN ADVISORS GROUP 90 0 0%
SENIOR MORTGAGE BANKERS INC 83 0 0%
M AND T BANK 83 2 2%
SENIOR AMERICAN FUNDING INC 80 7 9%
EVOFI ONE 80 69 86%
EQUITABLE REVERSE MORTGAGE COMPANY 75 0 0%
SENIORS REVERSE MORTGAGE 73 6 8%
PNC MORTGAGE LLC 71 0 0%
GENWORTH FINANCIAL HM EQUITY A 68 5 7%

Click on the image below to view the full report for this month.

Industry Trends - February 2010