Wholesale Segment Leads February Reverse Mortgage Volume Drop

Home Equity Conversion Mortgage (HECM) endorsements fell by 10.3% in the month of February 2021, for a total of 4,062 loans according to the latest HECM Originators report from Reverse Market Insight (RMI). The fall comes in the midst of generally heightened reverse mortgage industry activity that has been taking place over the past few months as the economic impact of the COVID-19 coronavirus pandemic continues, as volume again remained above the 4,000 loan threshold for the month.

Volume levels across both the wholesale and retail business segments recorded drops, though the drop in wholesale volume was slightly more severe at 12.8% compared to the retail reduction of 8.1%. However, each channel and many of the lenders that operate within them are nearly identical to the figures for the industry posted in December of 2020, observes RMI in the commentary accompanying the data.

However, several lenders managed to outperform the rest of the industry by posting volume gains for the month. These include Austin, Tex.-based Open Mortgage with a rise of 10.6% to 219 loans, American Advisors Group (AAG) gaining 6.9% to 1,437 loans and Annapolis, Md.-based South River Mortgage with a 5.2% rise to 122 loans. This also marks South River’s debut into the top 10 for RMI rankings, the commentary said.

Another picture of the industry is painted by looking at the data for the same period of time in 2020, just one month prior to the onset of the COVID-19 coronavirus pandemic was declared by the World Health Organization (WHO). In February 2020, total endorsement volume was 2,905 loans, with 1,398 of them coming from the retail channel and 1,507 of them coming from the wholesale channel. Figures appeared sharply lower the following month, before exploding to over 5,000 units in a month for May, 2020, a recent record.

Finance of America Reverse (FAR) and Longbridge Financial continue to lead the wholesale reverse mortgage channel with 45% and 35% market share, respectively.

RMI President John 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 HECM Originators report at RMI for specific breakdowns and regional performance data.

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