HECM Endorsements Fall 16.2%, Top-10 Market Share Surges

HECM endorsements fell 16.2% in April to 6,124 loans, according to a report from Reverse Market Insight this week.

The decline follows a year-over-year increase in March that represented the first such increase in almost two years, said RMI.

“The reverse industry has certainly had its share of detours and bumps, so it might come as no surprise that April’s endorsements were down,” RMI’s report said.



With 360 endorsements in March from non-FHA approved originators, the number of active lenders is understated for now, RMI says.

“It will be interesting to see how that regulatory evolution eventually affects things, as the big spike last month suggests it has the potential to reverse the declining number of active lenders once we can fully measure the impact here,” RMI says in its report. “It would be even more inspiring to see volume from non-FHA approved lenders lead to a boost in overall volumes.”

From a market share standpoint, in spite of declines across the nation, eight of the top 10 lenders showed increases in April, RMI says, which underlines the declining competition trend. The top 10 lenders comprised 67% of total volume in April. The top five lenders in April were Wells Fargo, Bank of America, MetLife, One Reverse and Generation Mortgage.

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Written by Elizabeth Ecker


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  • When looking at the twelve month moving totals, how many months in a row have total endorsements been less than 75,000? Whatever was JUSTIFYING those leaders back in November who were exclaiming that we would reach 100,000 endorsements this fiscal year surely would have begun to be seen in twelve month rolling totals by now. In fact the rolling twelve month total for the last fiscal year is still higher than that for the twelve months ended last Saturday.

    While “applications” (actually FHA Case Number assignments) may be up for March, the question still remains as to how the number of HECM endorsements for the fiscal year ending September 30, 2011 will compare to the HECM FHA Case Number assignment generated during the twelve months ending May 31, 2011 (commonly called the “pull-through rate”) to the same rate for last year. The odd year end for the FHA Case Number assignments is due to the common belief that there is a four month lag from assignment to endorsement.

    While some question the need to determine the definition of “application” used in the FHA Single Family Outlook (the report most of use in analyzing overall HECM market trends), the clear reason is the stage the loan is in the origination process.

    For example, if the correct meaning is truly application then those numbers would not necessarily reflect loans where the borrowers had completed counseling. If it is FHA Case Number assignment then we know counseling was completed. Based on the current environment, if the number of applications is actually the number of FHA Case Number assignments then the pull-through rate would be expected to see little impact due to prospects falling off because of the new counseling protocol. But if application means the literal number of applications, then one would expect to see some loss in endorsements reflected in the pull-through rate due to that new protocol.

    Based on my now confirmed belief that FHA means FHA Case Number assignments, when it uses the word “applications” in the Outlook report, I do not expect to see much impact on this year’s pull-through rate due to counseling. It would seem that those who disagree would expect to see that effect. Despite what some state, the meaning of words does have impact the when analyzing results. It is hard to believe that experienced and competent analysts would not understand that significance but apparently some do not.

  • Despite the loss of B of A, the endorsement numbers show the industry is more Top Ten heavy than at any time in the last year. As the loans from the retail unit at B of A finish the endorsement process, we should see a drop in the Top Ten domination of the industry.

    Whether the next few months will be the beginning of the decline in domination by the Top Ten or not is another matter. While there should be little change in the composition of the top five, there could be significant changes for the next five. There seems to be more fluidity in the composition of the lenders who comprise this group; there certainly is fluidity in their relative position within that five.

    We should know a lot more about who will be the players in this market by fiscal year end.

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