Wholesale Reverse Mortgage Volume Rebounds After Dismal November

After posting one of the lowest volume totals all year this past November, the reverse mortgage wholesale channel rebounded to close 2015 on a positive note and finally put an end to its three-month streak of declines. 

Reverse mortgage volume on the whole struggled in the last few months of 2015 as the everlasting impact of the Financial Assessment in late April continued to drag down production, with the wholesale segment taking the biggest hits. 

Overall, on an industry wide basis, endorsements for Home Equity Conversion Mortgages (HECMs) jumped 5.2% in December to 4,229 loans, following a string of three consecutive months of falling volume, according to recent industry data tracked by Reverse Market Insight (RMI).

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Since September, which saw a massive 18.8% drop in endorsements, industry volume has steadily declined each month with October’s numbers falling 7.3% and November dropping 7.1% to 4,020 loans—the lowest single-month volume total in all of 2015.

Meanwhile, wholesale volume plummeted during this Sept-Nov timeframe. In September, wholesale volume suffered a 26.2% decline to 2,080, and since then monthly volume has yet to eclipse 2,000 units per month in the wholesale channel. 

Retail on the other hand dropped 11.6% in September, but was able to regain some lost ground come November when the channel grew 1.6% to 2,467 units. 

December’s numbers, however, offer a breath of fresh air for the HECM endorsement volume, especially the embattled wholesale segment. 

Wholesale endorsements for December grew 9.8% to 1,705 loans, whereas retail increased 2.3% to 2,524 loans. With December’s numbers in the books, wholesale accounted for 43.4% of total industry HECM endorsement volume in 2015. Retail represented approximately 56.6%.

While the industry wide bump in volume during December was reassuring, given that January’s volume declined 8.1%, it is apparent that December did not signal the start of the Financial Assessment recovery just yet for the reverse mortgage industry, noted RMI in the newsletter for its latest data release.

As usual, December was a better month for some lenders compared to others. 

For one, Home Point Financial Corporation saw a 40% increase in December to 105 loans, bringing its full-year 2015 endorsement tally to 1,278 units. 

RMS/Security 1 Lending also saw a big jump during the month, rising 35.8% to 501 loans, reaching third place on the month and the company’s highest monthly total since August, when it reported 527 units. Year-to-date, RMS/Security 1 finished 2015 with a total of 5,333 units. 

Also showing strong growth to close out the year, Cherry Creek Mortgage Company saw its endorsement volume increased 25.4% to 74 loans in December—propelling the company to finish 2015 in the tenth ranked spot among the industry’s top lenders. Year-to-date in 2015, Cherry Creek reported a total of 1,111 units.

View the RMI data for additional lender rankings and December wholesale/retail channel splits.

Written by Jason Oliva