New Fiscal Year Brings New Reverse Mortgage Top 10

With the 2009 fiscal year ending on September 30, this month’s HECM volume report revealed a new list of the top 10 reverse mortgage lenders, very much changed from that of last fiscal year. The list is below, compared to that of 2009 FY. However, given how close many of the lenders are to each other in terms of the number of HECMs they endorsed, it is by no means clear how the list will shake out over the next few months.

October 2009:

1. Wells Fargo

2. Bank of America

3. MetLife Bank

4. Financial Freedom Acquisition

5. One Reverse Mortgage

6. 1st AAA Reverse Mortgage

7. First Mariner Bank

8. Security One Lending

9. Harvard Home Mortgage

10. Stay in Home Mortgage

Fiscal Year 2009:

1. Wells Fargo

2. Bank of America

3. World Alliance Financial Corp

4. Financial Freedom

5. One Reverse Mortgage

6. MetLife Bank

7. Countrywide Financial

8. Generation Mortgage

9. Urban Financial Group

10. 1st AAA Reverse Mortgage

Thus, from last year’s top 10, only 6 remain in the top 10 for October. The complete list for October can be found on the HUD website. The changes will also be reflected on the Reverse Mortgage Guides website in the Lender Directory in the near future.

HECM Volume in September Increases Over August

September’s HECM volume report as published by HUD (U.S. Department of Housing and Development) showed that the number of HECMs endorsed increased by about 500 loans from August to September. The number of HECMs endorsed in September was 9,473, while 8,933 HECMs were endorsed in August. However, this number does not reflect the dramatic increase in the number of case numbers assigned the last week in September during the final days of the former PLF limits. As such, the number of HECMs endorsed should rise rapidly in October and November, as they are processed and closed.

In the meantime, the HECM lenders in the top 10 remained unchanged from August. These top 10 lenders are measured by the total number of HECMs endorsed so far this year, explaining why some lenders that have left the reverse mortgage business are still in the top 10. The list is as follows:

1. Wells Fargo

2. Bank of America

3. World Alliance Financial Corp

4. Financial Freedom

5. One Reverse Mortgage

6. MetLife Bank

7. Countrywide Financial

8. Generation Mortgage

9. Urban Financial Group

10. 1st AAA Reverse Mortgage

It will be very interesting to see if this list changes in the next two months as the number of HECMs endorsed increases dramatically. The complete list for September can be found on the HUD website. The changes will be reflected on the Reverse Mortgage Guides website in the Lender Directory within the next week.

Financial Freedom Pulls Fixed-Rate Product From Illinois

Financial Freedom announced that effective immediately, it too is discontinuing fixed-rate reverse mortgage loans in Illinois. This comes after Bank of America stopped offering its fixed-rate product in Illinois. All these changes are due to concerns about the Illinois High Risk Home Loan Act (HRHLA) which only applies in the state of Illinois. The act is designed to protect borrowers against high-cost loans, and applies to all kinds of loans and mortgages. Under the threshold set by HRHLA, many fixed-rate products are high cost, since the total closing costs often exceed 5% of the principal limit of the loan.

It is important to note that the fixed-rate product changes in Illinois do not affect any other states. Meanwhile, borrowers in Illinois can still complete reverse mortgages using the LIBOR, while local lenders wait for changes to the HRHLA to be enacted. That said, MetLife and Reverseit are still offering their fixed-rate products… at least for the time being.

HECM Volume Increases in July; Top 10 Lenders Shaken Up

HECM volume increased dramatically this month. 9,830 HECMs were endorsed in July, up from 8,633 last month. This is a good sign if 2009 HECM volume is to surpass the HECM volume in 2008.

The same 9 lenders continued to possess an increased market share despite one of them (World Alliance Financial Corp) going out of buisness last month. One wonders if the increased number of endorsed HECMs from World Alliance Financial Corp (also known as Senior Lending Network) are a result of them trying to close out their pipeline as fast as possible. World Alliance Financial Corp rose to the #3 spot this month from number 4 a month ago. It will be interesting to see if they remain in the #3 spot next month.

The top nine lenders are ordered below with rankings determined by the number of HECMs endorsed by the lenders YTD. Financial Freedom only endorsed 10 HECMs last month, while Countrywide endorsed 8. One Reverse Mortgage surpassed Countrywide this past month in HECMs closed YTD. Countrywide was acquired by Bank of America back in January, and it will be interesting to see if the HECM volume attributed to them continues to decline as well (so far it looks as if it has).

Finally, it is important to note that only nine lenders were highlighted because several lenders, led by 1st AAA Reverse Mortgage Inc. are clustered under Urban Financial. This group has closed between 900 and 960 leads so far this year, but is still well under Urban Financial’s totals.

Top Nine HECM Lenders by Volume – June

1. Wells Fargo

2. Bank of America

3. Financial Freedom

4. World Alliance Financial Corp.

5. Countrywide

6. One Reverse Mortgage

7. MetLife

8. Generation Mortgage

9. Urban Financial

Top Nine HECM Lenders by Volume – July

1. Wells Fargo

2. Bank of America

3. World Alliance Financial Corp.

4. Financial Freedom

5. One Reverse Mortgage

6. Countrywide

7. MetLife

8. Generation Mortgage

9. Urban Financial

The complete lender list can be found here.

Recent(ish) News: Financial Freedom Recently Acquired by IndyMac

In recent reverse mortgage news, Financial Freedom was acquired by IndyMac last month. Or rather, One West acquired IndyMac and also received Financial Freedom as part of the deal. Regardless, Financial Freedom’s name changed from Financial Freedom Senior Funding to Financial Freedom Acquisition LLC. Apparently there were also some layoffs at Financial Freedom.

We realize that this is not the freshest news, but it does have a large effect across the industry, and we wanted to make sure it didn’t fall through the cracks.

Have a great weekend everyone!

"HECM for purchase" is in the wild

The HECM for purchase program (the ability to use a reverse mortgage to purchase a property) was announced by HUD months ago and it became a reality with Financial Freedom’s announcement that it has begun accepting purchase files from its wholesale partners.

Few brokers have gone through the training as of this writing but over the next month, expect the other major wholesale lenders to announce purchase programs and expect a wave of advertising from local brokers around March.

Some observers hope this program will help put a floor under property values by giving more people the option to buy a home.

That’s unlikely to be the case since the only homeowners who can use the HECM for purchase program are existing homeowners with equity. They will by and large use their funds to downsize to a smaller home rather than buy a second or larger home.

Financial Freedom (IndyMac subsidiary) acquired

The FDIC, which took over IndyMac Bank last year, announced that a consortium of investors led by IMB Management Holdings has agreed to acquire IndyMac for $13.9 billion.

This is good news for Financial Freedom, a subsidiary of IndyMac. Financial Freedom is one of the best assets in IndyMac’s portfolio since it is profitable and rumored to be worth $500 to $950 million.

It’s also good news for the thousands of borrowers, employees, and wholesale lenders who have built up relationships with Financial Freedom over the last decade.

Reverse Mortgage Lenders Are Switching To Call Center Models

Financial Freedom largely pioneered the reverse mortgage lending market with their nationwide network of “Reverse Mortgage Specialists.” They currently have around 400 field-based specialists but the number was once higher. Their model was akin to State Farm’s – an agent in every town.

It seems that model is giving way to the Geico model. Financial Freedom has been quietly building up a large call center in Irvine to handle the bulk of their sales. The reasons are ultimately economic but stem from the fact that Financial Freedom wasn’t able to effectively manage its field-based loan officers to get them to follow pipeline management and lead followup procedures.

Financial Freedom isn’t the only company moving to the higher volume, lower-cost call center model. Generation Mortgage and Quicken Loans (aka One Reverse) have moved in the call-center direction in the last year and other large players such as World Alliance (Senior Lending Network) have had this model for years.