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Wholesale Leads Retail in December Reverse Mortgage Endorsement Drop

Home Equity Conversion Mortgage (HECM) endorsements fell by 13.6% in the month of December 2019, for a total of 2,456 loans according to the latest HECM Originators report from Reverse Market Insight (RMI). The fall was led by the wholesale endorsement segment of business, which experienced a decrease of 21.1% that month, while wholesale levels recorded a smaller decrease of 8.5%.

While the year-over-year fall in HECM endorsements is over 20% when compared with full year 2018 figures, the sheer numbers may not reflect an accurate picture of the whole story according to RMI President John Lunde.

“HECM endorsements dropped again in December, finishing the year at 32,448 loans. That’s a decline of -22.2% from 2018, but that really does skew perception given that 2018 endorsements were inflated by 2017 fundings leaking into the first few months of 2018,” Lunde says in the commentary accompanying RMI’s data. “Suffice to say that most everyone we’ve talked to in the industry lately was in much better spirits than a year ago.”

For the second month in a row, the average performance of all top 10 lenders underperformed based on industry-wide metrics, with the top 10 recording a total loss of -16.8%. Still, a few top lenders managed to post gains in December regardless of the larger trend.

Reverse Mortgage Funding (RMF) led the pack of the top 10 in gains, rising 45.1% to 386 loans. HighTechLending followed, with a gain of 44.9% to 71 loans after posting disappointing figures in November according to RMI. Open Mortgage also posted a gain of 12.9% to 91 loans.

Although the overall percentage figure is nearly identical to RMI’s previous December HECM Lenders report, Lunde previously detailed for RMD that the HECM Originators report is useful in seeing the splits in and health of the retail versus wholesale channels, which helps to illustrate how lenders are doing from a more individualized and channel-specific perspective.

Read the HECM Originators report at RMI for specific breakdowns and more regional performance data.