Reverse Mortgage Volume Remains Flat, Growth Ahead

For all those hoping the industry would start of 2011 with a big month in volume, sorry, it didn’t happen.

Reverse mortgage lenders endorsed 6,464 HECM units in January, down 1.4% from the month before and 15.3% lower from January 2010 according to Reverse Market Insight.  The number of active lenders fell 34.5% from last year, but resulted in an a net average number of reverse mortgages per lender increase of 29.5%.

“While there were 18.9% more active lenders in January compared to December, the overall trend continues to show more production per lender,” said John Lunde, President of RMI.

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Reverse mortgage volume continues to stay relatively flat or one might say consistent, which isn’t always the case.  However, RMI still thinks a strong application surge towards the end of 2010 means growth is right around the corner.

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“The last three months of 2010 each showed an increase of 1,300 or more applications, which should translate into growth of 1,000 or more endorsements per month as they start showing up,” they said.

RMI continues to feel 2011 will see volume trend up, but “if it’s going to be special we’ll need to see application volumes back above 10,000 per month.”

For the full report, see here.

 

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  • What is the big deal with more loans per lender? It is simple division. It does not mean anything. It is a useless piece of information.

    If all of the lenders dropped out of the program but Wells, the loans per lender would skyrocket. As it is the dominance of Wells and B of A is growing when looking at the number of loans they endorse versus the market as a whole. For those of us who are concerned about such things, the picture is not getting better.

    What is happening is that as the market shrinks, the big two are seeing their numbers shrink less proportionately than the rest of the market meaning their market share as a percentage is actually growing.

    Even if the endorsements for each month of the remainder of this fiscal year go up higher than over last, the current cumulative numbers are so low, it will take a lot of increase just to catch up to the endorsement numbers for last year let alone beat the numbers from last year by over 20%. FHA HECM Case Number assignment numbers certainly do not warrant the optimism.

  • If the April 1 Fed ruling becomes law, you will really see the originations of Wells Fargo and Bank of America skyrocket since much of their competition will disappear. That will not be good for consumers.

  • If the April 1 Fed ruling becomes law, you will really see the originations of Wells Fargo and Bank of America skyrocket since much of their competition will disappear. That will not be good for consumers.

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