Lenders Negotiate Peaks in Wholesale and Retail Reverse Mortgage Volume in August

Home Equity Conversion Mortgage (HECM) endorsements fell 14.1% in August 2021, to a total of 3,673 loans according to the latest HECM Originators report from Reverse Market Insight (RMI). The drop marked the first month in nearly a year that monthly volume failed to hit the 4,000 loan mark, a level maintained due to the generally increased activity in the reverse mortgage industry that has taken place. as the economic impact of the COVID-19 coronavirus pandemic continues.

The overall decline in approval volume for the month was led by the company’s wholesale channel, which was down 18.7% versus 11.2% for the retail channel. However, some reverse mortgage lenders saw specific channel volume spikes for the month.

“Open Mortgage dramatically increases wholesale volume, increasing by 1,101 loans in the past 12 months (second only to 1,114 wholesale loans added by longtime leading wholesaler FAR),” RMI detailed in its report. “They do this by capturing 36% of the volume of the brokers they do business with, again behind FAR.”

Meanwhile, South River Mortgage increased its own retail volume by 1,202 loans over the same period, a product of the increased HECM to HECM (H2H) refinancing activity that the industry experienced during the major part of the year, according to RMI. .

However, a surprising piece of data pointed out by RMI concerns the performance of the 55 Places lending branch, active in the HECM for Purchase (H4P) activity.

“55 Places is a great success story for HECM for Purchase,” notes RMI. “[They] has more than doubled since the start of the year to 40 loans, the vast majority being purchases rather than refi.

As previously reported following the release of a previous RMI approval report for August data, three of the top 10 volumes recorded increased from their July totals. The leaders in volume gains were Mutual of Omaha Mortgage (up 45.6% to 316 loans), Longbridge Financial (up 34.2% to 157 loans) and Fairway Independent Mortgage Corp. (up 15.7% to 118 loans).

H2H refinancing deals – which by definition serve reverse mortgage borrowers already engaged in the product category as opposed to new borrowers looking for a reverse mortgage – remained at nearly 50% of total volume. of HECM in August, according to the US Department of Housing and Planning. Development (HUD) ‘s August Endorsment Snapshot Report, cited by New View Advisors.

While specific people within the industry have different feelings about whether or not the company will be able to attract enough new borrowers in the future, many seem to share a consensus on what exactly a increased refinancing volume for the fortunes of the company as a whole, and what the industry should do in response to these realities once the inevitable refinancing boom has passed into the background.

RMI President John Lunde previously explained to RMD that the HECM Originators report is useful in seeing the divisions and health of retail versus wholesale channels, which helps illustrate how lenders behave. from a more individualized and channel-specific point of view.

Read it HECM creators report RMI for specific breakdowns and regional performance data.

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