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   The_Cynic

   September 15, 2018 at 12:28 am

   Optimism lives in the future since the present is just too tough to bear. I have yet to hear one word on how the industry intends to reverse six straight years of secular stagnation.

   We are going from extreme to extreme — no forward originators wanted–to we want all of the forward originators who will come. Suddenly we are once again focused on H4P, a product which has proved over and over again how few closings it can produce. Begging for a consumer “safeguard” that has shown not only have we proved how well intended improvements turn off prospects but also how such intentions can result in regulation that strangles demand.

   Fiscal 2019 is shaping up as a year of great possibilities, 1) month by month improved endorsements, 2) a higher proportion of originators to originations than ever seen before in this industry, 3) highest senior home equity, 4) largest senior population ever in the US, and 5) worst financial preparation for retirement among seniors in this decade, yet with the expectation of the lowest endorsement totals for any fiscal year since 2004.

   Total endorsements for the first six months of fiscal 2018 were 29,833 with about 18,800 more for the last six months of this fiscal year. Endorsements of just 18,800 for the last six months of fiscal year 2018 result in an average of 3,133 endorsements per month, lower than the supposed nadir for endorsements for fiscal 2018, the endorsement total for April 2018 of 3,345. If that does not prove how far we are from understanding the endorsement pattern for fiscal 2018, what will? Remember it was not RMD, NRMLA, a lender, or an individual orginator who called this out; it was a stat expert, RMI.

   Then there was the excitement in the first few months of this fiscal year that the conversion rate for the largest number of case number assignments for any month in the history of the industry (those of September 2017) would be horrible has proven to be completely false. (The modified annualized conversation as of 9/30/2017 was 67.7% and so far this fiscal year, it is 64.6%. For the three prior fiscal years, the conversion rate has been 63.1% (2014), 59.5% (2015), and 63.7% (2016), showing that the conversion rate normally has gone up or down by 3.1% to 4.2%. So to see a drop of 3.1% in the conversion rate is at the low end of the conversion rate change. This shows that the conversions of September 2017 case number assignments was quite normal.)

   Even NRMLA is in the game. The NRMLA CEO has told us that NRMLA has presented its ideas for what is needed to be changed in order to restore the HECM program to a robust source for cash flow for seniors. Yet so far NRMA has not told what the ideas it presented were. No doubt that will be presented at the Convention, if then. The appeal obviously has had no announced results which increases PLFs for fiscal 2019 at least through September 14, 2018.

   What we are proving is that a scattered approach for increasing demand is entirely ineffective. Yet fiscal 2019 seems doomed to that same ineffective approach.

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