HECM volume: Some major lenders buck trend
Despite an industry-wide decline in transaction volume, four of the country’s top 10 reverse mortgage lenders recorded growth in June.
American Financial (FOA) After falling behind, its endorsement total increased 4.1% to 534 loans Omaha Mortgage Mutual recent months. guild mortgage 56 loans also increased by 19.1%, while South River Mortgage and high-tech loans Positive growth was also achieved in June.
Asked whether declining case numbers could lead to a milder summer outbreak, Marshall Islands President John Lund said it was possible.
“From a case volume perspective, I don’t think we’re going to see a huge increase in endorsements this summer, but more of a sideways trend in the near-term range,” he said.
Each type of reverse mortgage use case also declined in June. “Equity takeout” loans – reverse mortgages that are neither purchases nor refinances – were down 4.8% from May. Purchase volume fell 10.8%, while refinances among HECMs dropped significantly by 27.5%.
“I’m not surprised by the drop in refinances, as that is likely largely due to loan limit increases earlier in the year, which came without a significant drop in interest rates,” Lund said of the data. Always a very limited opportunity, “Buy is one we watch closely and with the recent changes to checkout costs we expect that will open the door more fully. As the largest segment, stock takeaways are the most Stable, so lower volatility in May makes perfect sense.
Asked how four of the top 10 lenders could avoid a drop in their endorsement totals in June, Lund said geography is a key predictor of how something like this develops. The personal choices lenders make when attracting potential clients often determine how well they perform.
“Geographical regions are often more aligned with overall industry trends, and a single lender can create significant performance gaps purely through business decisions, such as increased/decreased marketing spend, prioritizing or de-emphasizing recognition from a resource perspective, or cultivating attractive internal Sales niches (such as forward loan officer relationships or service packages),” he said.
Geographically, the areas with the smallest declines are those where the industry is most prominent. The Pacific/Hawaii region fell just 2.6% for the month to 594 loans.
He said Lund and RMI will be watching closely as FOA and Mutual of Omaha continue their battle for supremacy in the reverse mortgage industry.
“I’m definitely watching with interest as these two compete for the top spot for the foreseeable future because their stories are so different,” Lund explained. “Mutual of Omaha has a strong brand and customer base outside of its reverse business, which provides impetus, while FOA has led the industry for many years in wholesale and acquired the largest lenders with particular strength in the retail space. We’re excited to see both men challenge for the title.
HMBS issuance: Moderate decline, maintaining historical lows
As has been the case for some time, HMBS issuance remains at historically low levels and is not expected to end the year anywhere near the record set in 2022, according to New View commentary accompanying the data.
Total HMBS issuance in June decreased by $29 million from May to $497 million, but the original number of pools issued in June was the same as in May (86 pools). Among leading companies, FOA once again topped the list of issuers with $159 million in issuances, an increase of $2 million from May’s figure.
Longbridge Financial fell $8 million sequentially to $110 million, while Mutual of Omaha and PHH Mortgage Company. – Will be renamed soon unified mortgage — $95 million and $85 million were issued in June.
When asked about the differences between issuance levels at the top companies, New View partner Michael McCully said it didn’t make a big difference.
“Looking at the issuance volume among the top four issuers, there is no difference; overall, their market share has remained between 90% and 95% for many years. “However, for the revenue expected to be less than 2024 For a $6 billion industry, 11 issuers have overall excess capacity. “
First-time production participation also fell to $331 million in June from $361 million in May. New View explains that looking at data for the same period in 2023, new loan output has dropped significantly compared with the same period last year. Among the 86 mining pools issued in June, 24 were first-time participating mining pools and 62 were subsequent participating tailings pools.
The changes from month to month are largely inconsequential, McCully said.
“The industry is not in a good situation, sales are so low,” he said. “Let’s see how HMBS 2.0 affects the industry and whether rates start to fall more permanently.”
When asked how New View anticipates distribution by the end of the year, McCully said it’s simple.
“All other things being equal, doubling production in the first half can provide a reasonable reference for full-year issuance,” he said.
New View also released its updated HMBS issuer rankings for the first half of 2024, showing that FOA accounts for 31.9% of the overall market. Followed by Longbridge (21.4%), Mutual of Omaha (18.4%), PHH (18%) and Traditional Mortgage Processing Companies (3.6%).
