Reverse Mortgage Volume Drags as Wholesale-Retail Gap Widens

Reverse mortgage volume declined for the second consecutive month in April, dragged down further by a near 20% drop in wholesale endorsements, according to the latest Reverse Market Insight (RMI) report

Total endorsement growth fell 9.7% to 4,168 loans in April from the previous month. Though only a slight decrease when compared to the previous month-over-month decline of 10.6% in March, April’s volume was greatly impacted by a wide disparity between retail and wholesale/broker channel performance.

“HECM endorsements declined 9.7% in April, but it was a tale of two business channels as retail/direct volume was flat but wholesale/broker volume declined 19.9%,” wrote RMI in a newsletter on the report.

On the retail side, endorsement growth posted a 0.2% gain in April to 2,362 loans, compared to 2,358 recorded in March. The last time the channel posted a positive monthly gain was in January, when retail endorsements rose 7.5% from December.

While greater volatility on the broker side has been common over the years, RMI notes it is rare to have the wholesale-retail gap this wide. 

“Broker volume has generally been more volatile—both quicker to go up in good times and quicker to go down in bad times,” RMI President John Lunde told RMD. “I suspect right now we’re seeing some brokers jump in and out of the reverse space while also keeping active on the forward side, which probably making the difference at margin on volumes.”

Lenders shifting to adapt to last year’s HECM program changes could just as well be creating some “lumpiness” in endorsement volumes, Lunde added.

Among the top-10 HECM lenders, American Advisors Group dominated the month of April with 1,258 total loans, a 46.3% increase from the prior month that now brings the company’s total for the past trailing twelve months to 9,610—7,670 retail and 1,940 under its wholesale channel. 

Most notably, the company reported a strong surge in retail volume of 997 loans within the single month.

Liberty Home Equity Solutions and Urban Financial of America  each pulled in 534 total loans for the month, bringing their total volume in the trailing twelve months to 9,058 and 8,199, respectively. 

One Reverse Mortgage, which took the number four spot among the top-10 lenders, recorded 409 loans in April, all retail. 

View the latest Reverse Market Insight data.

Written by Jason Oliva

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