Slumping Retail Production Drags Down Reverse Mortgage Volume

Reverse mortgage volume sunk deeper into its decline in April, following a 1% drop in total endorsement volume from the previous month. Except this time around, the monthly decrease was driven by a reduction in retail reverse mortgage production, recent industry data indicates.

Home Equity Conversion Mortgage (HECM) endorsements fell to 4,240 loans in April, down 6.3% from 4,526 in March, according to the latest data report from Reverse Market Insight (RMI). The decline included a 7.6% decrease in retail endorsements of 2,465 and a 4.4% decrease in the wholesale channel to 1,775 loans.

Despite the monthly setback, some lenders managed to experience significant growth during the month. For example, both Reverse Mortgage Funding (RMF) and Liberty Home Equity Solutions each managed to increase approximately 37% in April—the highest single-month growth among any of the top-10 industry lenders.

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Outside of the top-10, lenders such as Approval First Home Loans and Bank of England were able to more than double their volume from March, rising 128.6% to 16 loans and 114.3% to 15 loans in April, respectively.

Additionally, Cherry Creek Mortgage Company grew its single-month volume in April by 140% with 36 loans, up from just 15 in March.

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HECM endorsements through April 2016 – Source: Reverse Market Insight

Reverse Mortgage Solutions/Security One Lending saw one of the largest monthly declines in April, as its endorsement volume plummeted 62.1% to 106 loans, down from 280 units during the previous month.

As for unit growth over the last 12 months, RMF continued to lead with way on the retail side, with 955 units added during that timeframe. This now brings the company’s total retail unit volume to 1,521 over the last 12 months trailing April 2016. With 2,012 wholesale units, RMF combines for 3,533 units added in the last 12 months.

Following closely behind RMF for retail unit growth is Synergy One Lending, which added 947 total units to its retail channel in the 12 months trailing April.

Meanwhile, Live Well Financial added 581 retail units; Nationwide Equities added 506 units and Dyjero Corporation added 294 retail units to round out the top-5 lenders for unit growth.

On the wholesale front, Finance of America Reverse led the way with the addition of 907 units over the last 12 months, bringing its 12-month trailing total wholesales volume to 5,437 units.

Liberty Home Equity Solutions followed, adding 765 units to bring its 12-month trailing wholesale volume total to 4,153 units along with 2,247 retail units.

Live Well Financial and Synergy One Lending also found themselves among the top-5 lender for wholesale growth by unit, adding 520 and 486 units, respectively. These numbers add to each company’s retail production to bring their total 12-month trailing endorsement counts to 3,113 and 1,437 units.

Completing the top-5 lenders for wholesale growth was Home Point Financial Corporation, which added 255 units over the 12-month period trailing April.

View the RMI data to see how other lenders performed, including both retail and wholesale channel splits.

Written by Jason Oliva

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  • When it comes to endorsements, we now have a trend and it is downward. BUT we should see a definite upward swell in the number of endorsements this month when compared to last month and then again for July when compared to June. August should show a slight dip in endorsements and as of yet since HUD has not posted case number endorsements for May, 2016, we are in the dark about what to expect in the way of endorsements in the last month of this fiscal year, September 2016.

    HOWEVER, one thing we do know to expect is a horrible drop in endorsements for the quarter ended September 30, 2016 when compared to the same quarter last year. The reason is that almost all of the wave of applications that received case number assignments in March and April last year in order to avoid financial assessment and were ultimately endorsed, received their endorsement in the quarter ended September 30, 2015. There was nothing that occurred in this fiscal year that drove case number assignments during March, April, or May of this year in the same way.

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