The reverse mortgage industry doesn’t seem to be making up lost ground from Bank of America and Wells Fargo’s exits, evidenced by a 16.8% decline in home equity conversion mortgage (HECM) endorsements in October 2011, according to Reverse Market Insight’s most recent HECM Lenders newsletter.
The aftershock of Wells’ exit has arrived, as endorsements dropped to 4,653 in October—the lowest total since the industry bottomed out in May 2010 from the first principal limit reductions, says RMI.
MetLife endorsed the most loans in October with 913, nudging Wells Fargo into second place with 787.
That’s probably more bad news than good, though, says RMI.
“We’re almost sure to break last year’s bottom next month as Wells volume declines further, and if other lenders can’t pick up some of the loans Wells isn’t doing, we could be looking all the way back to July 2005 for the last time monthly endorsements were under 4,000,” says the newsletter.
Source: Reverse Market Insight, October 2011 HECM Lenders
Even more surprising than Wells’ decline, says RMI, is the “relative weakness” of several other lenders in October, as MetLife Bank, Urban Financial Group, Generation Mortgage Company, and Security One Lending all saw negative endorsement numbers.
“The aggregate decline of these five lenders is slightly larger than the total industry decline, while One Reverse, Genworth, AAG, and Reverse Mortgage USA helped stem the tide,” RMI notes.
View the October 2011 HECM Lenders newsletter here.
Written by Alyssa Gerace