Reverse mortgage endorsements fell across channels in July, losing more than 27% on the wholesale side and 24% on the retail side of the business. But looking back at past volume, brokers look to have fared much better than retailers in terms of volume.
The broker channel is still “running significantly ahead” of retail, says Reverse Market Insight in a report this week. It’s due to one main cause currently: the exit of MetLife from the reverse mortgage business earlier this year. While the industry has nearly made up the volume lost following the exit, broker volume has been more resilient as former MetLife originators continue to make new homes.
“In July, there was less disruption to broker volume compared to retail volume by the Metlife exit. It’s a lot quicker and easier for brokers to move their volume elsewhere than Metlife retail reps to move somewhere else and get apps/fundings flowing to endorsements at the new employer,” says John Lunde, president of Reverse Market Insight.
Broker premiums, too, are a short term cause of the broker boost, Lunde says, but only in the short term as they help to delay the decision of whether brokers join up with other lenders under regulatory pressure across financial products and services.
That regulatory pressure is likely to determine the long term retail versus broker breakdown across the industry, Lunde says.
“Longer term I think the regulatory environment will be the strongest force in affecting the balance,” he says, “as we’ve seen play out post financial crisis generally.”
Written by Elizabeth Ecker