Reverse mortgage retail segment leads April volume drop

The reduction from an historic March increase was mostly due to the retail side of the business according to new data from Reverse Market Insight

Home Equity Conversion Mortgage (HECM) endorsements fell slightly in April 2022 by 3.8% to 6,265 loans, a drop which pales in comparison to the over 26% volume increase recorded the prior month. Most of this drop was attributable to the retail side of the reverse mortgage business, as that channel saw a 5% reduction in volume while the wholesale side of the business recorded a drop of only 2%.

This is according to data compiled by Reverse Market Insight (RMI). April is became the second consecutive month with production of over 6,000 loans, a threshold that would’ve seemed highly unlikely just a couple of years ago, though volume has consistently trended downward — albeit incrementally — since that point.

“While we don’t currently publish proprietary volume numbers, there was no shortage of anecdotes at the NRMLA Western conference last month that a significant share of volume is shifting to proprietary in the current environment,” RMI said in its report.

RMD recently reported on such anecdotes both from members of the trade association’s executive committee, as well as the trend towards proprietary volume increases as seen from the president of American Advisors Group (AAG). However, recent turns in the proprietary market could potentially lead to a cooling of that market in the months ahead, but such an occurrence remains to be seen.

In April, six of the top 10 lenders managed to buck the full industry trend related to volume reductions. Fairway Independent Mortgage grew 15.2% to 304 loans, continuing its focus on building new customers as opposed to focusing on refinance transactions, RMI said.

Open Mortgage and HighTechLending also managed to grow its figures in April notably, according to the report.

Volume in May saw another reduction to under 6,000 loans for the first time since March, though levels still remained high by historical standards. The breakdown between the wholesale and retail channels for that month are still forthcoming.

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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