Wholesale Leaders – February 2010

There’s a new sheriff in town, and that sheriff is Generation Mortgage.  Ok, that may be a little extreme, but on an endorsement volume basis we saw Generation take the lead on the wholesale side of the business in February, with 831 loans endorsed during the month. This is a major improvement over where they were in the second half of 2009, where they were a little late in getting a competitive fixed rate product to market.  With over 70% of the reverse mortgage business being fixed rate product in the latter portion of the year, not having it proved costly.  However, it appears they have fixed that, and in a big way.  However, before we anoint them as the new kings of the wholesale biz, it’s worth a wait of a few months to see if the performance is consistently good, or if there was some catching up in endorsements from prior periods.

Genworth also gained in February with a more attractive fixed rate product offering to underline the point, although they saw less pickup than Generation.  Rounding out the trio of higher performers this month is Urban, recently bought by Knight Capital Group.  Their wholesale volume of 653 units put them in 3rd place for the month, behind Generation and Bank of America.

What are some other trends to point out for February?

  • Wholesale endorsement volume dropped 12.6%, vs a 1.5% decline in Direct Endorsements.  One month does not a trend make, particularly since this still leaves broker/wholesale activity considerably above direct retail lending given the better figures in Dec & Jan, although we’ll continue to watch closely for signs of a trend given that the current environment seems tilted toward direct retail lenders right now.
  • Another way to look at whether big lenders are faring better than small is the combined market share of top 10 lenders.  On that score, we’re getting early indications that the big are getting bigger as a full 92.5% of all volume in February went through either retail or wholesale channels at the top 10.  That may not surprise anyone who has been in the business a while, but it underlines the point that smaller volumes point to more concentration as smaller players exit the business.

MarketConcentration

  • February proved a volatile month for lenders’ combined endorsement volumes, with 7 of the top 9 lenders (excluding WAF) having moves of 30% or more up/down.
    • Wells Fargo and Bank of America saw relatively steady volumes, up 11% and down 12% respectively
    • Generation, Urban and Genworth were the winners as outlined above, each up 36-88%
    • The remaining lenders saw declines ranging from 40-47%

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Wholesale Leaders