As we already saw in the March Retail Leaders report, the decline in HECM applications has led to a dramatic drop in endorsements just as surely as gravity accelerated Newton’s apple. While we continue to believe there is more pain to come on the endorsement side of the equation, we’re optimistic that applications will continue to pick up meaningfully once we see final April numbers later this month.
In the meantime, let’s sift the wreckage of March endorsements from a business channel perspective to discern what we can, in advance of the market by market look in next week’s Industry Trends report. To the numbers!
- Both wholesale and direct endorsement volumes dropped by double digit percentages in March, with brokers/wholesale down 21.9% vs a 10.9% decline for retail/direct. This continues the pattern we saw last month as wholesale trended substantially weaker. With just 255 more units in the month, the channels are the closest they’ve been since November. It seems inevitable that retail will pass the brokers, and fitting that the last time this occurred was last April. Anyone care to predict a repeat performance?
- The large lenders continue to dominate the industry, with 88.3% of March volume. This is slightly off from last month’s figure of 92.4%, but still above trend for the past 12 months.
- March also highlighted a changing landscape across channels, with many lenders having clearly shifted volume in one direction or another
- Metlife has more than doubled overall volume in the past 12 months, up 114% and remarkably proportionate in growing both retail and wholesale more than 100%
- Wells Fargo has always been heavily weighted toward retail, although in the past year the mix has been changing slightly as the wholesale side grew 66% in a slightly down period for retail endorsements (-11%)
- Generation and Genworth have both substantially grown their wholesale business, each increasing more than 165% in the past 12 months, while retail grew slower in the case of Generation and not at all for Genworth. As of March, only JB Nutter had a higher weighting to wholesale in their business mix among the top 10 than these 2.
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