Despite MetLife’s exit from the Reverse Mortgage sphere, the industry’s outlook shows optimism when considering the increase in case numbers issued for May and an increase in HECM endorsements in June, according to a recent report from Reverse Market Insight.
With MetLife’s exit, the industry could have followed the same downward pattern that resulted from last year’s Wells Fargo exit. There has instead been a 16.9% increase in endorsement growth and an increase in number of cases issued, totaling 6,992, according to the report.
“The single most optimistic thing is that the number of cases issued went up in May, and we were expecting them to fall,” said John Lunde, President of Reverse Market Insight, Inc. “To see that number go up was encouraging. It really suggests that there’s a consumer demand and that the exit of MetLife isn’t harming the distribution.”
Projections for the duration of 2012 are not expected to change despite these numbers or the exit of MetLife, said Lunde.
“It is only going to be four or five months this year without MetLife. A single month wouldn’t cause us to change our forecast, but from our perspective this has a much more positive effect for next year,” said Lunde.
The 16.9% increase in endorsement growth is not a landslide increase, but it is helping the industry make its way from the bottom of the range into the upper half, according to Lunde. “To be seeing a demand is always a good thing,” said Lunde.
Some lenders are directly benefitting from the presence of consumer demand and market share left by MetLife. According to the report, Urban Financial totaled a June volume of 357, which tied with December 2011 as the company’s highest volume in the past 12 months. American Advisors Group saw a 12.7% increase in loans.
The Southeast/Caribbean still leads regions in market performance with 1,025 loans.
View the Reverse Market Insight report.
Written by Erin Hegarty