A trio of emerging giants are the proud parents of the three-biggest originators of government-insured reverse mortgages. One of the companies sees more than $1.7 trillion dollars in untapped equity for potential borrowers.
Business slowed last month for originators of home-equity conversion mortgages, with 4,833 reverse mortgages endorsed by the Federal Housing Administration during February.
A month earlier, HECM lenders closed 5,189 HECMs, bringing year-to-date volume to 10,022 endorsements.
Business was better last month than during February 2012, when HECMÂ endorsements totaled 4,361.
The HECM statistics were included in current and past editions of the newsletter Reverse Market Insight.
February’s biggest HECM originator was Security One Lending, where volume rose to 723 loans from the previous month’s 646.
In January, Walter Investment Management Corp. announced an agreement to acquire Security One. Walter Investment has thrust itself into the ‘group of 10’ top mortgage servicers with several recent acquisitions.
The second-best performance last month came from Liberty Home Equity Solutions, where HECMÂ volume slipped to 681 from 764 endorsements in January.
Liberty operated as Genworth Financial Home Equity Access Inc. before an agreement was struck for Ocwen Financial Corp. to acquire the unit. Atlanta-based Ocwen, which has ascended to top-tier servicer status through an aggressive strategy to acquire mortgage servicing rights, expects to close on the Liberty acquisition by April 1.
“There is sizable untapped potential in the reverse mortgage market that could sustain future growth,” an Ocwen filing with the Securities and Exchange Commission said. “Based on CFPB data, we estimate the total potential size of the reverse mortgage market at $1.9 trillion, of which only about 10 percent has been penetrated to date.”
No. 3 last month was One Reverse Mortgage LLC, which saw HECM endorsements decline to 421 units from 458 the previous month.
One Reverse parent Quicken Loans Inc. ranked as the third-biggest traditional residential lender in the country during the fourth-quarter 2012, climbing from the fifth spot in the third quarter. The Detroit-based company also recently jumped into mortgage servicing.
American Advisors Group was the fourth-largest HECMÂ originator in February with 387 closings, then Generation Mortgage Co.’s 239.
There were 345 active HECM lenders in February, off from 365 a year earlier.
