April Wholesale Growth Outpaces Retail Reverse Mortgage Endorsements

Home Equity Conversion Mortgage (HECM) endorsements saw rise of 12.7 percent in April, hitting a threshold of 2,899 loans according to the latest data from Reverse Market Insight (RMI). Interestingly, while retail endorsement growth experienced a hike of 6.5 percent that month, wholesale growth easily outstripped it by growing at a rate of 21.2 percent.

“Strong Wholesale growth outpace[d] slower Retail results,” said RMI President John Lunde in a post introducing the data. “But both [channels are] contributing to a solid month of volume.”

When asked about the trend observed in comparing the wholesale versus retail channels for this month of data, Lunde told RMD that it has been continuing in this direction for a while, but may lead into a decrease in the near future.

“Wholesale has performed better than Retail volume the past four months on this report now, and is at 45 percent of the market in April,” Lunde told RMD in an email. “That market share is the highest it’s been in a year but seems more likely to recede a bit than continue increasing in the next few months given the prior 11 months were in a range of 36.8-41.8 percent, making this more of an anomaly so far.”

The brokers can also exhibit a faster reaction time to trends when compared to the Retail side of the business, Lunde added.

“We typically see Wholesale/brokers react faster to changes in the market volumes than Retail, so if that pattern holds we’d expect Retail volume to grow faster for a few months unless we see a strong surge in volume,” he said.

Stand-out performances from specific lenders include Liberty Home Equity Solutions, which saw an endorsement increase of 66.4 percent, leading the pack in terms of an observed endorsement increase and reaching its highest figures since March of 2018. San Diego, Calif.-based Synergy One Lending also grew by 19.7 percent to 164 loans for the month, while One Reverse increased by 16 percent to 247 loans.

Although the overall percentage figure is nearly identical to RMI’s previous April HECM Lenders report, 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 full HECM Originators report at RMI for specific breakdowns.

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