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Reverse Mortgage Wholesale Volume Outpaced Retail in October, 2021

Reverse mortgage volume reached a 2021 high in October, rising by 16.3% to 5,029 loans, breaking the 5,000 loan threshold for the first time since industry volume began its COVID-19 spike in May 2020. In terms of the divide observed between the retail and wholesale segments of the business, performance on the wholesale side outpaced retail for that month according to data compiled by Reverse Market Insight (RMI).

“HECM endorsements jumped significantly higher in October, and now we know that wholesale/broker volume powered 23.2% [of industry volume] compared to 12.3% growth for retail/direct,” RMI detailed in its October HECM Originators report.

Among some of the major performers beyond FHA-approved lenders, Ennkar saw a spike of 82% to reach 133 loans for the month. Geneva Financial rose by 43% within the month making for a rise of 103% year-to-date, while Residential Home Funding noted a 579% increase year-to-date, recording 118 loans over the past 12 months.

While July may have marked the end of a streak of monthly volume above a threshold of at least 4,000 units that the industry had seen since late 2020, September’s volume spike managed to overcome the shortfall observed in August completely.

October’s succeeding volume levels have put the industry back into a solid position, but it remains to be seen how much of the October volume has been bolstered by HECM-to-HECM refinance transactions which analysts have previously warned is a diminishing resource.

While November saw a very slight reduction in total loan volume when compared directly with October, the drop was modest at best and still saw that month become the second best of 2021 in terms of raw reverse mortgage endorsement volume, according to RMI.

The biggest risk to industry momentum at the end of the year and into 2022 remains the prevalence of HECM-to-HECM refinances as a sizable share of total loan volume, according to RMI President John Lunde earlier this month. However, with the recent announcement of a 2022 reverse mortgage lending limit of very nearly $1 million, that risk is slightly diminished.

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 regional performance data.

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