Smoother Sailing – Wholesale Leaders June 2011

This report will be known as “HECM Originators” starting next month to identify it as the best source of rankings of all companies originating HECM loans, regardless of FHA approval status.

While the rest of the world is deciding just how much the rating agencies matter 3 years after the 2008 debacle, volatility in the reverse mortgage world is looking relatively calm by comparison.

Retail endorsements were up 13.8% on the month, while Wholesale/brokers endorsed 11.7% more loans. This marks three consecutive months where the performance gap between channels has been relatively low, with both channels moving up/down together after a much bigger performance gap in the wake of  regulatory changes at FHA and the federal/state levels. The trend may not continue given how much change we’ve seen lately, but it looks reasonable to assume for now that we’ve seen the FHA approval and loan officer compensation changes fully baked into the endorsement numbers by channel.

At this point it looks as though we’ve settled into a new normal of 60% Retail (defined as the same company taking application and closing loan) and 40% Wholesale. That compares to an average of 47% in 2009, with most months in a range from 41-50% (two months over 50%). The range in 2010 was considerably wider around a higher average of 54%, encompassing everything from 42% in January to 66% in December. That last month looks like an outlier right now, as the 2011 average thus far is 61% with a relatively tight range of 59-63%.

Housekeeping Notes:

  • This report will be known as “HECM Originators” starting next month to identify it as the best source of rankings of all companies originating HECM loans, regardless of FHA approval status
  • As of next month the Retail Leaders report will be re-named “HECM Lenders” to better identify it as the ranking of HECM Lenders closing loans under their own FHA approval. Lender volume presented on this report includes third party originations (TPO) of any company not FHA approved under their approved sponsor lender.
  • Industry Trends will be re-named “HECM Trends” in keeping with the above changes

Click the image below to access the full report:

Wholesale Leaders