Retail Production Feels Major Sting of Lagging Reverse Mortgage Volume

Reverse mortgage volume hit a rough patch in May as Home Equity Conversion Mortgage endorsements fell to their lowest single-month level since August 2014. The month saw declines among both retail and wholesale origination channels, with the former feeling the worst sting of the monthly drag, according to recent industry data.

May HECM endorsements fell 14.2% overall to 3,639 loans, a decrease precipitated by a 17.5% drop in retail volume and a 9.6% shortfall in wholesale originations during the month, as reported in the latest market data from Reverse Market Insight (RMI). Collectively, May volume comprised 2,034 retail and 1,605 wholesale units.

Even with the overall industry volumes at the lowest level since August 2014, when endorsements totaled 3,256 units, RMI notes the wholesale/broker volume has “held up significantly better in the subsequent 21 months.”

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Since August 2014, wholesale average monthly volume has been 49% above the low point, compared to just 33% higher for retail, RMI noted in its newsletter for the HECM Originators—May 2016 report issued Tuesday.

Meanwhile, wholesale volume in May remained 22.9% above the August 2014 lowpoint, while retail was just 4.6% above that level.

“Put it together and you see Wholesale showing more resilience to volume declines lately compared to Retail, underlining the role smaller companies play in the industry,” RMI states in the report.

As for the lenders with the highest unit growth in the 12 months trailing May 2016, Synergy One Lending took the top spot, having added 1,036 units over the course of this period.

Reverse Mortgage Funding ranked second with the addition of 959 units over the last 12 months; Nationwide Equities at third with 538 units added; with Live Well Financial and HighTechLending rounding out the top-five lenders as each added 503 units and 300 units, respectively.

On the wholesale origination side, Finance of America Reverse added 967 units to command the top-ranked spot among the top-five lenders, which included Liberty Home Equity Solutions with 622 wholesale units; Synergy One Lending with 545 units; Live Well Financial with 407 units and Home Point Financial Corporation with 217 units added over the last 12 months trailing May.

Beyond the top-five lenders for retail and wholesale unit growth, other companies experienced notable gains both during May and year-to-date (YTD).

Fairway Independent Mortgage Corporation ranked tenth overall in May with 45 HECM endorsements, representing a 12.5% increase from the previous month. On a YTD basis, Fairway ranks 17th overall with 167 loans this year through May 2016. At this time last year, the company reported just 29 units.

American Pacific Mortgage grew its monthly volume 75% to 28 HECM endorsements in May. Compared to the first five months of 2015, this year’s YTD total of 110 units is 12.2% higher for the company.

To see the full lender rankings for May, with Retail and Wholesale channel splits, check out the RMI report.

Written by Jason Oliva

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