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HECM Wholesale and Retail Channels Drop Evenly in March

Home Equity Conversion Mortgage (HECM) endorsements saw a sharp drop of 35.7 percent in March across the wholesale and retail channels, settling at 2,573 loans according to the latest data from Reverse Market Insight (RMI). The drop in those endorsements across both channels is likely indicative of a return to more stable levels on the heels the partial federal government shutdown experienced at the start of 2019.

The HECM Originators report for March 2019 shows retail channel dropping 36.1 percent to 1,497 loans. The Wholesale channel’s recorded drop of 35.1 percent to 1,076 shows that both channels’ losses were relatively in-line with each other.

“HECM endorsements declined in March without the tailwind from loans built up during the government shutdown,” said John Lunde, president of Reverse Market Insight, in his post introducing the report. “The decline was fairly balanced.”

In terms of what these figures mean for the larger market, Lunde added that he still thinks these figures could indicate a return to normality after the significant noise generated by the government shutdown.

“I still think the March volume basically confirmed the average monthly volume trend around 2,500,” Lunde told RMD in an email. “It’s unusual, but not particularly notable that the channels were almost identical in March given we were coming off of a distorted February picture for comparison.”

In terms of stand-out performance from lenders, Federal Savings Bank saw their loan originations jump by 366.7 percent to 14 loans, placing them in 23rd place on the month’s rankings. Ocean Lending saw their endorsements grow by 150 percent to 10 loans, placing them in a tie for 27th place on the rankings with C2 Reverse, which doubled its endorsements compared with the prior month.

Although the overall percentage figure is nearly identical to RMI’s previous March 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 full HECM Originators report at RMI for specific breakdowns.

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