For Three States, Half of Reverse Mortgage Market Share Up for Grabs

Three of the top ten states have about half—if not more—of their reverse mortgage market shares up for grabs thanks to Financial Freedom, Wells Fargo, and Bank of America exiting the industry, and this represents opportunities for lenders who remain, Reverse Market Insight’s ReverseIQ October newsletter reports.

Looking at endorsement volumes from October 2010 through March 2011, the last two quarters where the three lenders were fully represented, RMI examined their collective market share.



Source: Reverse Market Insight, October 2011 Reverse IQ Newsletter

Wells, Financial Freedom, and BofA took up 49.4% of the market share in California, the state with the highest reverse volume. That number inched past the halfway mark to 51.9% of sixth-ranked New Jersey’s market share, and shot up to 62% of North Carolina’s (ranked #10) share.

Additionally, there is likely to be significant volume still up for grabs in several of these top ten states for those that know where to look, says RMI, although the industry should expect to see volume decline in some of these states, especially North Carolina, due to market share concentrations.

Because of restrictive regulations and a market share that’s been dominated by exiting banks, there is big opportunity for lenders who are able to do business in North Carolina, but, RMI cautions, this could also mean lost opportunity for both consumers and the industry if there aren’t enough lenders available to serve that 62%.

View the October ReverseIQ Newsletter here.

Written by Alyssa Gerace

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  • It will be nothing short of a miracle if total industry endorsements do not fall significantly this fiscal year.  Beware of those who cry out in Boston we will reach 100,000 endorsements this fiscal year.  That prediction plus a couple of bucks will get you a decent cup of coffee.

    I am no Pollyanna but it appears the top seven lenders (excluding Wells) should have bumper crops this fiscal year despite the overall drop.  Most of the other top forty should also do well.  The benefit to other lenders will no doubt be somewhat more spotty but no lender should be negative about the opportunity for endorsements this fiscal year based on predictions of an overall drop; both should be true — significant increases for most individual lenders but a drop off in total industry endorsements.

    Originators are in an entirely different situation.  Those who are boots on the ground will find that call centers will become far more prevalent.  Lenders will encourage boots on the ground while doing all they can to grow out their call centers.

    Now more than ever before larger lenders and originators are at odds.  Now more than ever, an originators association is needed.  NRMLA represents the interests of lenders, not necessarily originators. 

    • >>Now more than ever, an originators association is needed.  NRMLA
      represents the interests of lenders, not necessarily originators.

      I’ve never thought of that before, but it seems to make sense.  I’ve always thought of NRMLA supporting me, but I’m not a Lender.  It’d be interesting to hear more thoughts on this subject.

  • Speaking as a counselor in North Carolina, I can say that my volume of counseling requests has not dropped at all since Wells left.  There are a number of new lenders in the market and they seem to be taking up the slack quite well. Also, TV advertising has increased significantly in the last year or so.   I don’t think there is any danger of a potential borrower not being able to find a lender. 

    • >>Speaking as a counselor in North Carolina

      Do the folks you counsel mention it’s a burden to have to drive to your facility to receive their counseling?  And if they’ve got to drive a distance, and have difficulty finding a ride, are you allowed to travel to their house to provide the counseling?  Or are you able to provide them counseling via the telephone in that instance?

      • I find that it is seldom a problem in my area.  If a client cannot come to me, I go to them.  I have done both in-person and phone counseling, and I find the in-person counseling much more effective and enjoyable for both the client and the counselor. 

        We do have parts of the state that are underserved, and telephone counseling can be arranged on a case-by-case basis if the client is unable to travel and is capable of receiving counseling by phone (i.e, can hear adequately on the phone). 

  • There are a lot of lenders trying to fill the void left by WF, B of A, and Financial Freedom, but none have the “punch” of the biggest players.  Virtually all the bank branches had a client connection to their reverse mortgage consultants and that is now gone.  The remaining players must find a way to fill the void.  The best RM loan officers from those big players will continue to serve both their clients and their referral network, but you can’t help but expect a reduction in funding volume due to the loss of the biggest RM sources.

  • There is a big hole left by the absence of WF, Bank of America and others.  Many of the loan officers have moved on and the most successful will continue to make their business work as though they were still with their former lenders.  This is a BIG void that will take time to fill with the remaining players.  One must expect a short-term decline since the remaining players don’t have the “punch” the big bankers had.  The big banks supported the RM program in the branches and there is no one at the banks seeking to identify and refer bank clients for reverse mortgage prospects, at least not at their previous level.  The most successful RMCs will try to maintain contacts with their bankers, but not at the same level as when the bank supported the program.

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