In the wake of the housing crash and exits from three of the largest reverse mortgage lenders, the industry is headed toward its third straight year of loan volume decline reports Reuters.
Last year, volume was down 37% from its peak in 2008 and this year it’s expected to fall again according to John Lunde, president of Reverse Market Insight. What’s driving the downward trend?
The exits from Bank of America, Wells Fargo, and Financial Freedom, which together accounted for about 35% of the market, says Lunde.
“We’ve noticed a down trend since Bank of America stopped taking applications,” he told Reuters. Wells Fargo’s departure was announced in June, so it’s too difficult to say how it will impact the number of loans originated.
If the lenders hadn’t exited the business, volume would’ve likely grown during 2011 says Lunde.
“The industry was on pace to grow before the exits. This year’s decline will be all about these companies leaving the market.”