The “Brave New World” of Reverse Mortgage Lenders—What’s in Store

How will monthly reverse mortgage rankings fare in the “brave new world” that remains without Bank of America and Wells Fargo? Reverse Market Insight reported Tuesday on the final wholesale and retail/TPO/broker loan counts and aimed to answer that question.

With overall endorsements down 1.8% from November, the entire decline can be attributed to the TPO/wholesale originators. In order to get a sense of what the future will hold, however, it’s important to examine application data, RMI says.

“Case numbers issued (we use this interchangeably with applications) dipped in December to the lowest level since January 2010, but if we exclude the impact of Wells/BofA/FF it tells a different story,” RMI writes. “December’s total is right between May and June figures for surviving lenders, raising the question whether higher volumes from Aug-Nov were just the result of applications shifting from the exiting lenders in a one time surge.”

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December’s application numbers present some cause for concern, RMI says, but there are many companies bucking the trend of a down market. Urban Financial has risen to the No. 1 spot for wholesale, while MetLife, One Reverse and American Advisors group hold the ranks for the top three retailers when excluding Bank of America and Wells Fargo.

View the RMI report.

Written by Elizabeth Ecker

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  • It is odd that RMI insists on reporting on the calendar year when HUD reports on a fiscal year.

    Currently HUD does not release reports breaking down FHA Case Number assignments by lender and TPO.  That would be helpful.

    When RMI reports on endorsements information for November 2011, that really reflects application activity generated in June and July 2011.  That is not the fault of RMI but the report must be put into perspective.  Who would market based on trends that were true 8 to 9 months ago?

    In less than four months, substantially all of the HECM applications which will be endorsed during this fiscal year will have been taken.  The Case Number assignment information for January is still weeks away.  Expectations for higher endorsement numbers for this fiscal year over last were no different than other years except most of those who recklessly promoted ridiculous numbers in October and November 2010 were subdued in October and November 2011.

    What is much different today than on October 1, 2008 is that our profits were HECM are substantially higher.  Industry gross revenue for this fiscal year should be greater than for the fiscal year ended September 30, 2008. 

    • We report on calendar year because that’s how our clients and the world outside the federal government view the industry.

      Please note from its title that the chart in this article is based on HECM case numbers issued, not endorsements.

      Endorsements are a more lagging measure than fundings or applications, but can still be useful given the relatively long lived trends associated with the reverse industry, particularly from a market share perspective.

      • John,

        I do not disagree that your clients like it but it is not true that “the world outside…” looks at things on the calendar year basis.

        If we look back 9 months ago, Wells Fargo was in full swing and we were just beginning to get some idea about the impact of B of A no longer being in the market.  It was not until July that we really knew what the impact of B of A leaving the industry really was.  So 9 months ago, we were working in the dark.

        It is good to see we are moving away from the old “application” language to the more appropriate “case numbers assigned” lingo.  It may take JUST another century but hopefully HUD will “quickly” follow.

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