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.

 

1st Reverse Mortgage Folds

Wilmington Savings Fund Society (WSFS), FSB announced earlier today that effective today they will begin winding down 1st Reverse Mortgage Company’s operations. Starting on July 31st, 1st Reverse will no longer accept any new applications. They remain committed to completing all loans currently in the pipeline (or in the pipeline by  July 31st). This includes processing, underwriting and funding the loans.

The news about 1st Reverse Mortgage is slightly disconcerting in light of Senior Lending Network folding earlier this month. While 1st Reverse was not as large of a player as Senior Lending Network, it did complete a significant volume of loans. Although the time seems ripe for the reverse mortgage industry to grow and prosper, the folding of these companies lends some support to the argument that the problems in the real estate market are negatively impacting the reverse mortgage industry, rather than providing the industry with enough business to flourish despite the economy.

 

Senior Lending Network Stops Accepting New Loan Applications

On Tuesday the Senior Lending Network, also known as World Alliance Financial Corp., announced that it would no longer be accepting new reverse mortgage loan applications.  The decision comes down from World Alliance Financial Corp.’s parent company, KBC Group, based in Belgium. KBC Group has been hard hit in the recent economic downturn, and, with the recent repurchase of Equity Key by its founders, appears to be seeking to shed its US holdings. Both World Alliance Financial Corp. and KBC Group have announced their diligence in finding a buyer or capital partner, but if they don’t, KBC Group has said it will begin to wind down World Alliance Financial Corp’s operations.

This move is destined to have ramifications throughout the industry considering that World Alliance Financial Corp. has endorsed 2,892 HECMs thus far this year, making it the fourth largest lender and holding a significant market share, around 3.4% of the market.  As a result, it will be very interesting to see which lenders pick up both Senior Lending Network’s former customers and their former leads.  Next month’s HECM volume report is likely to paint a different picture from what many in the industry have grown accustomed to over the past few months.