Brokers Pick Up the Slack, Wholesale Reverse Mortgage Volume Up 15%

Wholesale origination channels saw the vast majority of reverse mortgage growth in February, with retail channels shrinking across the industry, a report today from Reverse Market Insight finds.

While endorsements during the month of February were up just 5%, the number of brokered loans to wholesale lenders grew more than 15% with retail endorsements falling near 3%. The February trend represents a bigger industry picture with wholesale having gained 58% since October with retail down 5%.

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Source: Reverse Market Insight

“This is the second month in a row we’ve seen TPOs (wholesale) outperforming direct lenders (retail) and the third month in the past four,” wrote RMI in the report. “Even more interesting, all three have come in growth months for wholesale, whereas in the past year it was the lesser victory of declining less than retail.”

The number of wholesale loans has “surged” from 1,612 loans in October to 2,547 in February, according to RMI, representing a “significant” bounce back from recent months when wholesale declined significantly and retail led overall industry sales.

Written by Elizabeth Ecker

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  • 42% of endorsement volume before last fiscal year came from the retail sales of the two biggest lenders.  

    I entirely disagree with the RMI analysis this month.  I believe the numbers show the resilience of retail sales of lenders.  

    In 2/2010, overall endorsement volume was much higher yet comparing retail sales of lenders, little has changed despite the loss of B of A and Wells.  Who openly predicted that this would be the case?

    Today TPO endorsements can come from any state or nationally approved lender; TPOs do not have to be approved by HUD.  So why haven’t the sales of TPOs gone through the roof?

    If endorsement volume drops over the next few months as seems to be the trend for the last two years and based on case number assignments seems likely, who will suffer more?  If it is TPOs, then that will show how really unreliable and erratic that source really is.  The next few months will be interesting to follow.        

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