Holidays seem to come faster each year for all of us (Christmas music will start in July this year!), and then they’re gone just as fast. Reverse Market Insight's first Wholesale Leaders report of 2011 shows a similar disappearance, as the broker/wholesale side of the industry sees the beginnings of a positive trend from September-October vanish in November. After two consecutive months of outpacing retail/direct endorsement growth, wholesale fell way behind retail in the upswing. Gaining 10.4 percent in most months would be a strong performance, but pales in comparison to the 34.5 percent surge in retail. For the past six months, wholesale has grown slower when the industry grows, but also shrinks less when the industry declines.
Leading the list in retail and wholesale performance are Wells Fargo with a 23.1 percent market share, Bank of America with an 18.2 percent market share and rounding out the top three is MetLife Bank with a 14.4 percent share of the reverse mortgage market.
That might be a recipe for slow and steady wins the race, but at least so far it’s only been enough to slow the advance of retail’s market share from 47.8 percent in December 2009 to 61.1 percent in November 2010.
Among top 10 lenders, three of the nine with wholesale business grew their volumes, while just two of the 10 grew retail. That may not sound like a dominant performance, but it’s easier to understand why the top 10 gained share if we look at how many grew or declined less than the industry overall.
Retail channel outperformed industry decline for eight of top 10 lenders
Wholesale channel outperformed for seven of the nine top 10 lenders with wholesale business. In this context, the clearest trend of all is that small lenders are losing ground to their larger competitors. Retail versus wholesale/broker will remain an interesting perspective, but is just a visible effect of the underlying cause: small lender erosion.
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