Large Lenders See Reverse Mortgage Market Share Grow to 64% in 2010

While reverse mortgage endorsements were down 35% in 2010, Reverse Market Insight points not to volume declines, but consolidation as the biggest industry trend of 2010 in a report released Thursday.

During the year, the number of active lenders fell by 47.2% and the largest lenders reaped the benefits. According to RMI, the top 10 lenders saw their retail market share grow from 40.5% in January 2010 to 64.7% in December. “Clearly, the higher volume companies did not suffer 2010 in the same fashion as smaller brokers and lenders,” says RMI in its report.


Source: Reverse Market Insight

Bank of America’s decision to leave the industry earlier this month will likely move the top 10 market share back down without another massive brand and distribution network to replace it.

One question that remains unanswered is where the bank’s retail volume came from. If production came largely from the bank’s retail branches or current customers, it’s likely that volume won’t be coming back in 2011. However, if business was generated by individual retail loan officers, “they are likely to find homes elsewhere and the industry will retain that volume,” says John Lunde, President of RMI.

Since the regulatory environment clearly favors bigger lenders, “the trend of fewer, larger lenders is intact and looks set to continue for the foreseeable future,” says RMI.

View a copy of the report here.

Written by Elizabeth Ecker

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