Closing out 2011

December 2011 Top 100 HECM Lenders Report

December’s report gives us a peek at what to expect in 2012… fewer overall endorsements industry-wide but more loans per lender. Many lenders should see continued substantial growth this year. Download the December 2011 Top 100 HECM Lenders Report here.

Watch 7 Trends for 2012 here (new video)…
2012 Reverse Mortgage Industry Trends

4 comments

The_Cynic January 3, 2012 at 2:58 pm

Remembering back to the 2006 NRMLA conventions and 2010 NRMLA National Conventions, industry leadership is now struggling.

In the 2006 national conference and even more so in the regional conferences that followed in early 2007, ridiculous predictions were being tossed around the industry like great white sharks toss seals off of Seal Island, South Africa. We were told that the industry would have so many proprietary reverse mortgage originations that HECMs might drop down to around 10%-20% of all reverse mortgage originations by 2010.

In 2010 and well into early 2011, there were cries that HECM production would not just go up but would exceed 100,000 endorsements, a 33% increase in endorsements. Then as it became evident the fiscal year would be short of that number, a whimper rose up that we would see that production for the calendar year.

Well, not only did the endorsements come in at less than 74,000 for last fiscal year but less than 69,000 for last calendar year. Based on who was making the predictions, I was calling for 85,000 endorsements. What is odd about the endorsement predictions from last 2010 and early 2011 is that the total application numbers announced by HUD would never have provided those kinds of endorsement numbers. No one explained where these large endorsement numbers were going to come from.

Industry leadership seems to take a Pollyanna/ostrich approach on many issues. Where we will be in total endorsements by the end of this fiscal year has little voice in the industry (the ostrich phase). It seems those same leaders who proclaimed the soon arriving golden age of the industry are either now out of the industry or just licking their wounds. Either way, there is a hole in responsible leadership which needs to be filled even when the news is not what we wish.

Reply
Mitch Hackney January 4, 2012 at 8:39 am

Is there a map showing which states produced HECMs for 2011 ? It would be nice to know. The avg loan per state is so low it makes projecting, on a personal basis, for 2012 seem almost rediculous. One basic I learned from MBA’s origination study guide from 1962 is that no one can increase the size of the market. It is what it is. One’s expectations or dreams may far exceed
reality.

Cheers

Reply
Shannon Hicks January 4, 2012 at 9:02 am

Mitch,

I was only able to a couple of state summaries of HECM Endorsements. One is a spreadsheet you can download here. You may want to reach out to Reverse Market Insight as well and they may be able to point you in the right direction.

Reply
The_Cynic January 4, 2012 at 12:55 pm

Mitch,

All excellent points. The market is what it is and nothing will change that.

I was surprised today to read a stat guy and NRMLA Board member say that 2012 can be either good or bad. Yet he sits on a pile of data which says how the first quarter will be as to endorsements — case number assignments through November 2011. And the picture as to endorsements for the first quarter is not particularly bright. In fact there is a good chance endorsement totals for the quarter will not reach 18,000. How that be a sign for anything good in light of HECM endorsement history? He should have been making those remarks about calendar year 2012 on September 1 — not January 3rd when so much of the year’s endorsement information is already known.

Since HUD uses the fiscal year, I have never really relied on calendar year numbers. There is no great reason for HUD to ensure that all of the potential endorsements for December have been processed by the end of the calendar year. It is very much different (or should be) as to September 30 HUD’s year end.

As to endorsements, applications taken after August 2012 generally will have no bearing in the count of endorsements for this calendar year. That means there is seven plus months for potentially “good application months.” In just 56 days half of the year for obtaining applications which will impact the endorsement count for this calendar year will be gone. That seems whacko but that is the way “the market is.”

Reply

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