HMDA Knowledge Names Prime 10 Reverse Mortgage Lenders in 2020, Wholesale Outpaces Retail in June 2021

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The Client Monetary Safety Bureau (CFPB) launched a brand new report and evaluation of information disclosed in 2020 by the House Mortgage Disclosure Act (HMDA) in an effort to raised perceive the panorama of the mortgage market. The brand new evaluation options in depth quantities of mortgage info disclosed by monetary establishments, and options key info particularly related to the reverse mortgage trade and the House Fairness Conversion Mortgage (HECM) program.

In a 12 months of each heightened curiosity and enterprise for the reverse mortgage product, the HMDA knowledge helps to present some extra context to the way in which the enterprise has carried out in relation to the broader mortgage market in addition to some key metrics highlighting enterprise realities which have been mentioned quite a bit just lately. These embody the traits related to HECM-to-HECM refinances together with a comparability between HECMs and House Fairness Traces of Credit score (HELOCs).

Moreover, the reverse mortgage trade noticed its wholesale channel outperform the retail channel for the primary time in 5 months this previous June, in response to knowledge compiled by Reverse Market Perception (RMI).

HMDA knowledge: HECM outpaces HELOC

In direct comparability to the reverse mortgage market, the HELOC market appeared to pattern downward in 2020 when the information was examined by the CFPB.

“The big improve within the complete variety of originations and purposes in 2020 is pushed by the rise in closed-end mortgages,” the HMDA knowledge launch stated. “The variety of HELOC data continued its downward pattern from 2018 and the entire variety of HELOC originations declined from 1.042 million in 2019 to 869,000 in 2020. However, the entire variety of reverse mortgage originations elevated from 35,000 to 43,000 12 months over 12 months.”

That is usually in-line with what different reverse mortgage trade analysts have stated about 2020’s improve in quantity, however the destiny of HELOCs might also be tied to the discontinuation of the product providing at some main lending establishments throughout the heaviest days of the COVID-19 coronavirus pandemic.

In mid-April of final 12 months, JPMorgan Chase suspended its HELOC choices in a transfer that was within the spirit of preparation, the group stated.

“As a result of financial uncertainty, we’re quickly pausing new purposes for dwelling fairness strains of credit score,” stated Trish Wexler, chief communications officer for Chase client and group banking in an electronic mail to RMD on the time. “Prospects can nonetheless faucet into their dwelling’s fairness by means of a cash-out refinance of their present mortgage.”

This led to some hypothesis by teachers and professionals {that a} main establishment pausing its HELOC choices might give a possible benefit to reverse mortgage firms, in response to Dr. Wade Pfau and Stephen Resch of Finance of America Reverse (FAR). Whether or not or not there’s a direct relationship between Chase’s determination to droop HELOCs and the rise in reverse mortgage originations is unattainable to say, nevertheless.

Prime 10 reverse mortgage lenders

The CFPB evaluation of HMDA knowledge additionally took a more in-depth take a look at the highest 10 lenders working within the reverse mortgage house.

“In complete, the highest 10 reverse mortgage lenders accounted for 39,649 reverse mortgage originations, or roughly 91.7%, of all reverse mortgage originations reported below HMDA in 2020,” the information reads. “American Advisor Group [sic] was the most important reverse mortgage lender that reported HMDA knowledge in 2020, accounting for roughly 35.0% of all reverse mortgage originations reported. It was adopted by Finance of America Reverse LLC with an annual market share of 20.2%.”

A graph showing the top 10 reverse mortgage lenders based on 2020 HMDA data. CFPB | CC0
CFPB HMDA knowledge on the highest 10 reverse mortgage lenders in 2020.

Past AAG and FAR, the ultimate remaining lenders within the CFPB’s high ten tabulation embody Reverse Mortgage Funding (RMF); Mutual of Omaha Mortgage; PHH Mortgage Company; Longbridge Monetary; Open Mortgage; HighTechLending; Liberty House Fairness Options; and All Reverse Mortgage, respectively.

Apparently, each PHH and Liberty are subsidiaries of Ocwen Monetary Company, with Liberty serving as a division of PHH. On the time it grew to become housed at PHH, the lender modified its title from “Liberty House Fairness Options” to the less complicated “Liberty Reverse Mortgage” in March of 2020, however the CFPB knowledge nonetheless displays the title the lender maintained firstly of the 12 months. This company change-up doubtless necessitated two units of HMDA knowledge to be reported for this era; one from Liberty and one from PHH.

Further HMDA knowledge analyzing mortgage efficiency in 2020, together with for reverse mortgages, might come from the CFPB sooner or later. Learn the 2020 Mortgage Market Exercise and Tendencies report on the CFPB.

June 2021: reverse mortgage wholesale channel outpaces retail for first time in a number of months

HECM endorsements fell by 4.2% within the month of June 2021, for a complete of 4,158 loans in response to the newest HECM Originators report from RMI. The autumn comes within the midst of usually heightened reverse mortgage trade exercise that has been going down over the previous few months because the financial impression of the COVID-19 coronavirus pandemic continues, as quantity once more remained above the 4,000 mortgage threshold for the month.

Apparently, June marked the primary time in 5 months that the wholesale channel outperformed its retail counterpart, with the shift being usually mirrored within the efficiency ranges of the main reverse mortgage lenders within the nation. Nonetheless, solely three lenders within the high 10 managed to extend quantity in June.

Mutual of Omaha Mortgage rose 43.5% to 333 loans, marking its highest month-to-month complete because the 2017 principal restrict issue (PLF) modifications went into impact in January, 2018’s endorsements. They had been adopted by HighTechLending’s 10.5% bump to 95 loans, which was adopted by FAR’s 0.2% bump to 622 loans for the month.

RMI President John Lunde beforehand detailed for RMD that the HECM Originators report is helpful in seeing the splits in and well being of the retail versus wholesale channels, which helps for example how lenders are doing from a extra individualized and channel-specific perspective.

Learn the HECM Originators report at RMI for particular breakdowns and regional efficiency knowledge.

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