Reverse Mortgage Lenders Report Growth, Despite Falling Industry Volume

Declines in both the retail and wholesale lending channels dragged down reverse mortgage endorsements during one of the lowest volume months of the year. But for some lenders, that month was a stepping stone for growth over the last year, according to recent industry data.

Home Equity Conversion Mortgage (HECM) endorsements reached a new low for 2016 when they dropped 6.2% in July from the previous month to 3,530 loans. Production during the month was characterized by a 7.2% decline in retail endorsements to 2,033 loans, and a 4.8% decrease in wholesale volume with 1,497 units.

“Wholesale had a fifth straight month of decline, but when you factor in the bigger volatility on Retail with a few ups but much bigger drops, they’re both ending up in the same place (down 23% since Feb.),” RMI President John Lunde told RMD via email.

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Though the greater industry felt endorsement volume constrict in July, the month contributed to several lenders’ retail and wholesale growth over the past 12 months trailing July.

Synergy One Lending, Inc. led the way as the top lender for retail and wholesale unit growth. Over the 12 months trailing July, the company added 1,201 retail and 553 wholesale units to its volume. The growth is substantial, considering Synergy One reported just 31 retail units and 66 wholesale loans during the 12 months trailing July 2015. Through July 2016, the company ranked eighth overall for volume.

On the retail side, Reverse Mortgage Funding reported the second-highest unit growth with 773 units added over the last 12 month period; followed by Nationwide Equities Corporation, which added 636 retail units; while Live Well Financial grew its retail volume by 303 units.

ReverseMortgages.com continued to grow its business since first opening its doors in July 2014. With 300 loans year-to-date in 2016, the company added 321 total retail units over the last 12 month period trailing July. On a monthly basis, the company’s volume is up 26.9% from June.

In terms of wholesale unit growth over the 12 months trailing July, Longbridge Financial LLC was second only to Synergy One with the addition of 237 wholesale units during the period.

Finance of America Reverse, the industry’s largest wholesale lender by volume, added 125 wholesale loans over the last 12 month period, bringing its total volume during this period to 6,564 loans.

Meanwhile, FirstBank and HighTechLending, Inc. helped round out the top-5 lenders for wholesale unit growth by adding 93 and 59 loans, respectively, bringing their total 12-month trailing volume total to 641 and 1,077 units.

See how other HECM originators performed through July 2016.

Written by Jason Oliva

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  • While the article fuzzes up the actual situation overall to some degree, in less than two weeks we will know how this fiscal year did in total endorsements. Through August 2016, total endorsements for this fiscal year are less than 45,200. While 4,900 endorsements in September may have been nothing to reach during the fiscal years 2007 through 2011, it is a huge mountain to climb in 2016.

    If the industry does not reach 50,000 endorsements this fiscal year, it will be the first time since fiscal 2005. Several of us have been braced for the worst fiscal year for endorsements this fiscal year in over a decade since November 2015. While we cannot predict the exact count for this fiscal year just yet, its outcome will be a huge disappointment for many.

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