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This report was compiled from data courtesy of Reverse Market Insight.
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February 2015 Top 100 HECM Lenders Report
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As a prominent commentator and Editor in Chief at HECMWorld.com, Shannon Hicks has played a pivotal role in reshaping the conversation around reverse mortgages. His unique perspectives and deep understanding of the industry have not only educated countless readers but has also contributed to introducing practical strategies utilizing housing wealth with a reverse mortgage.
Shannon’s journey into the world of reverse mortgages began in 2002 as an originator and his prior work in the financial services industry. Shannon has been covering reverse mortgage news stories since 2008 when he launched the podcast HECMWorld Weekly. Later, in 2010 he began producing the weekly video series The Industry Leader Update and Friday’s Food for Thought.
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12 Comments
WHAT % IS BANKS ? AND HOW MANY IN THE TOP 100 IS BANKS —- NO 20 HRS. OF C.E. ?
Despite reports of better media coverage of Saver v.3, this year is already starting out worse than last. Does more positive media coverage convert into better endorsement production? Absolutely not.
The same was true with Baby Boomers turning 62. Just because 10,000 Boomers have done that for everyday of every year since January 1, 2008, HECM endorsements barely went up in fiscal 2008 and 2009 and have trended down ever since.
Home values have been recovering for several years now with an inverse impact on the HECM endorsements. In 2008, I was certain that with a growing senior population and recovering home values, increases in HECM endorsement numbers would not be far behind.
Well, where are we today? After two full months and many optimistic predictions about endorsement volume in the months before financial assessment. Unfortunately that is not the case at all.
Once again we see low endorsements in the first part of the year; the start of this year is worse than last. We need change and we need it now!
The five major items generally declared that we need for endorsement growth are 1) senior population growth, 2) home value appreciation headed in the right direction, 3) a stronger HECM product, 4) a better media environment, and 5) a more positive outlook about HECMs from the financial community as a whole.
This marks the seven anniversary of when the first turned 62. The oldest Baby Boomers just turned 69! That means that over 21,900,000 Baby Boomers are now 62 and not nearly that many seniors have passed away in the last six plus years. The ranks of those over 62 have never been so substantially large. While there are still 11 plus years of Baby Boomers who have not turned 62, when will their population boost of the senior population have ANY impact on HECM endorsement growth. We have the population now and according to our leaders (a rather questionable claim), borrowers are much younger than they were even a few years ago. This means growth of the senior segment is far less responsible for growth than we ever thought it was in prior years.
Home appreciation has been headed in the right direction for several years now and yet home appreciation seems to have no impact on HECM endorsement growth. Some call the recent changes made to HECMs great for consumers but that is not what consumers are telling us in our endorsement numbers. Our endorsement numbers were much better in years when media coverage was so bad that even our prospects were telling us about it before we could begin explaining how a HECM might help them. Then there is the support of the financial community; when has it been anything close to what we have seen in the last two years?
So where will our growth come from? The Extreme Summit told us that they held the secret but what they held was wasted money on ads that could never have worked and three feel good rallies in three larger media markets.
It is past time for NRMLA to focus on endorsement growth rather than good news on the HMBS front and other distractions. Good media coverage has done little to stimulate growth and HMBS information will eventually dry up if our endorsements do not start taking off.
Forget about nice parlor talks on social media, H4P sleeping giant nonsense, the ratio of good media on reverse mortgages versus bad, and other marketing mumbo jumbo. We need to find where our best opportunities lie and focus on that. How can our present situation change? Where are the well researched efforts in that regard? We saw enormous endorsement growth when the five major factors were not nearly as positive as they are today but what we saw was enormous growth. Will it take another housing value bubble to get there again or are things we can do to actually “reverse” the endorsement trend we have been experiencing since the end of fiscal 2009?
We as the originators in this industry need to rise up and demand help from our employer leadership and NRMLA. It is time we proactively begin doing more than just an ill fated and significantly flawed Extreme Summit. We need research and direction not more of the same.
With over 58% of our endorsements for the last two months coming from the Top Five HECM mortgagees, we have to look at what overall loss in HECM volume is doing to them.
First we see AAG and its % YTD change. It bucks industry trends by a huge margin at 58%. Then we see the second largest producer of endorsements and the only other over 1,000 after two months, RMS. Their volume loss % YTD is horrible at almost 36%. The two largest HECM endorsement producers YTD show two extremes.
Then we come to One Reverse at over 16% growth and Urban at almost 14%. Both are defying the overall downward trend. Finally we see Liberty at an astonishing loss of almost 50%. No doubt some part of that has to do with the impact of its parent company woes.
Among the other Top 100 mortgagees, there are of course some ridiculous % increases especially one of 4850% which had little impact on the overall drop in endorsements and a decrease of over 94% at Generation.
While the individual lenders have their own stories to tell, what we are seeing is significant inconsistency in the impact of another year of lower endorsements on our industry’s top lenders. While lenders and originators focus on their own production, it is time we give an eye to the direction of where the industry as a whole and suggest how we can do better.
(The opinions expressed in the comment above are not necessarily those of RMS or its affiliates.)
As an industry, we need to stop being misled by over optimistic estimates and good intentions. One industry leader when asked about how the industry would grow responded with the name of the leader of the Extreme Summit who is also the head of Liberty. Yet look at what has happened not only to the Extreme Summit but also to Liberty’s endorsements. Both are in a mess. Why don’t we wait for results before enthusiastically endorsing what is so obviously misplaced trust.
Such results are not to be unexpected. After all these ideas were presented by marketers to marketers. The presenters know what motivates the listeners and they know how to sell that. Forget facts, trends or stats. What counts is who can out claim the other. The order of the day was one upmanship. You would think the NRMLA leadership would have stepped in but then again when looking at some backgrounds, perhaps that kind of decision making would be encouraged.
There is little to no hope of endorsement increases from the activities of the Extreme Summit. We need to look at less irrational exuberant ways to attack our problem. We need to look with less rosy glasses how the public perceives what we call a better HECM for consumers. Rather than owning its OBVIOUS weaknesses, we tried to hide them. Perhaps consumers have seen through our less than forthright propaganda because that is exactly what our endorsement numbers have been telling us for the last 10 months.
Until we can accept what we are seeing and act on those facts, trends, and stats, we will always be looking for the quick fix, the most optimistic chooses, and the way of ever decreasing industry endorsements. What we as an industry have now seen and experienced through cooperation and working together is poor results, financial loss, and leadership endorsement loss even at their own companies. Despite what some promoted, cooperation does not always lead to good results. It all depends upon what is being rallied around.
Three words- home health care.
Sorry Chicken Little’s, while I completely agree that the Extreme Summit was a total and complete bust, there are 3 (and only 3) reasons why HECM Endorsements experienced explosive growth from 2006 to 2009 and then subsequently imploded from 2010 until now.
Anyone care to take a guess…?
Drum Roll please…
Wells Fargo
Bank of America
MetLife
These three enormous companies were the only actors in the play who brought large volumes of THEIR OWN CLIENTS to the HECM dance folks. Additionally, they were all aggressively completing with each other.
Wells Fargo hardly even bothered to market the HECM product to their own customers until BofA joined in 2006 then Bang the race was on for the next 4 years. Once they all left, the party got kinda dull.
If you take out the HECM Endorsements from these 3 companies from 2006 until today, guess what happens… The total HECM endorsements are about 55,000+/- per year on average.
Honestly folks, this can’t be that much of a surprise. You what to jump start explosive Endorsement growth!? Don’t Extreme this or H4P that.
Think of it this way. You want to get a whole bunch of folks to your golf event.
You can spend all of your marketing $ on flyers, TV ads, radio, mailings, yata, yata and yata.
Or
You can find a way to get Tiger Woods and Phil Mickelson to play each other at your event.
Get at least 2 Major National Banks to come to the dance and then we can really have a HECM’ of a party.
Driving in Reverse,
What a novice thing to say. Do your homework before making such sophomoric conclusions and ridiculous claims. If you want the numbers go to the NRMLA website at
http://www.nrmlaonline.org/rms/statistics/?article_id=601
None of those three companies left before February 2011 (Bank of America first), Wells did not leave until late summer 2011 and MetLife Bank did not leave until spring 2012. Yet our largest endorsement drop was not after fiscal 2011 but during fiscal 2010 (which ended on 9/30/2010) when all three were with us. Where were YOU in 2010? Obviously not in HECM World.
Our first drop after fiscal 2009 (our peak fiscal year for HECM endorsements at 114,692) was fiscal 2010 which dropped 35,586 endorsements to 79,106 which is more than half of the drop since 2009 based on our lowest fiscal year endorsement count since then (fiscal 2014 at 51,642 which is a drop 27,464 since fiscal 2010). What is even more interesting is that the year after MetLife left, our endorsement volume grew by 9.6% to 60,091.
So what is clear is that MetLife being here or not meant nothing to the endorsement count. Bank of America and Wells Fargo meant something but much less than you claim, perhaps 14,000 endorsements give or take 3,000 or so.
I do not know where you are getting your stats from but they are worthless and your integrity and honesty in discussing the effect of these banks leaving our industry is not nearly as high as you think it is.
Why is everyone fighting about how poorly our industry is doing? I’ve been doing REVERSE 100% for 8 years now and it’s gone from 5 per month per rep to about a 1/4 per month per rep, due to volume decrease from 16,000 mo. to around 4-5,000 per month BUT, because of the rumored “HUGE” commissions in REVERSE, everyone and their brother has been joining us. A person leaves and three (3) more join. None appear to be REVERSE specialists and focused on REVERSE alone. Instead of bickering about this, we all need to finally realize, the negative publicity we constantly are fighting, combined with our leaders exaggerating how things really are, combined with worsening comp plans across the board, in the name of compliance, (raise your hand if your comp plan in 2015 is better than in 2008!), combined with Wells Fargo, Met and B of A all leaving the biz, (not to mention Financial Freedom, Generation and other smaller than the Big Three Reverse names that left), people ask WHY? This LO (salesman) can’t be telling me the truth when all these giant industry leaders drop out. Then add lower amounts for seniors, lower appraisals, lower pay, the 60/40 rules, the non borrowing spouse rules, the HELOC changes of Dec. 15th and add to it the never ending onslaught of CHANGE including the March 2nd, (April 27th latest) Financial Assessment Tool (FAT) and you have somewhat skeptical audiences out there among our senior (over 62) population. Their aging but certainly not stupid! Go ahead, try to turn this around! Good luck! This would take a Presidential White House Announcement (from the next President) to get seniors interested again. Or, just get Financial Planners on Board and make it a part of every retirement portfolio. But wait, they’ll take Variable, under 60% and draw $0 as they want to supplement their monthly income with it while their existing portfolio is left to grow another 10 years. Don’t get me wrong, that can be great, and even I’ve done it myself at 66, but, how much can one LO earn when the closing costs are $10-15,000 and they draw $0 more? Not much.
Seriously thinking of doing something else, as hard to take this daily negativity much further. I used to be a very positive individual. Obama said he was all about change and boy, did we get change in the last 6-7 years. I have a little in my pocket now.
Mike,
When was the volume ever 16,000 per month? Over a year that is 192,000 endorsements. We never got to 115,000 endorsements in a single fiscal year. That is less than 10,000 per month on average.
Otherwise, we are generally in agreement.
Hey Mike,
I was surprised by the tone of your comment.
There are three general ways to be about what comes to us in life: optimistic, pessimistic, and realistic. Most people love optimism, many are pessimists, and a small but significant number are realistic.
You seem to have left optimism to embrace pessimism when it comes to the future of the industry.