For the second consecutive month, wholesale HECM endorsement percentage growth outpaced retail growth. The Wholesale Leaders Report from Reverse Market Insight (RMI) with data through February shows that despite the many regulatory challenges, wholesale production continues to battle back.

 

The total endorsements grew by 6.5% in February driven primarily by a 16.2% increase in wholesale endorsements.  Retail endorsements crossed over to positive growth of 0.6% after seeing a decline in January.

After falling to a low market share of 33.7% in December, wholesale production has bounced back significantly to 40.8% of total production.  It is still down from the 55.5% from last year, but the bounce is demonstrating that pronouncements of wholesale's demise have been exaggerated.  The graph below shows the endorsement split between wholesale (yellow) and retail (blue) production.

While wholesale production has been striving to battle back from losses over the preceding year, Urban Financial Group stands out as the only wholesale producer in the top ten to increase their wholesale production over the past 12 months.

Challenges remain for the wholesale channel has the impacts of the loan originator compensation rule and other pending regulatory changes are yet to be seen.  It is generally anticipated that these rules, although they impact the industry as a whole, will tend to place greater pressure on wholesale/broker relationships.