Top 10 reverse mortgage lenders reshuffle after banner 2021

While the list comprising the top 10 reverse mortgage lenders has remained pretty consistent for the past couple of years, the rankings within those top 10 have shifted as the reverse mortgage business saw notable gains in its levels of business throughout 2021. The final month of 2021 proved to be the biggest of the year, and 2022 is so far off to a strong start by even outdoing the business levels seen in the final month of the prior year.

Here are the top 10 lenders in the reverse mortgage industry for the calendar year 2021, based on data compiled by Reverse Market Insight (RMI).

Rank Company in 2021 Company in 2020 2021 Rank Change
1 AAG AAG Hold
2 RMF RMF Hold
3 FAR FAR Hold
4 Liberty Reverse Liberty Reverse Hold
5 Mutual of Omaha Mutual of Omaha Hold
6 Longbridge Fairway Longbridge +1
7 Open Mortgage Longbridge Open +1
8 Fairway Open Mortgage Fairway -2
9 HighTechLending One Reverse HighTech +1
10 Advisors Mortgage Group HighTechLending Advisors +1

A stable top 5, with changes in market share

As is apparent based on the 2021 full-year rankings, the top 5 lenders in the reverse mortgage industry remain unchanged from their rankings in 2020. That’s only part of the story, however, as all five of those leading lenders recorded volume increases of between 7% and 40%, the latter figure being attributable to Mutual of Omaha Mortgage. Mutual of Omaha grew its market share from 5.9% in 2020 with a full-year HECM endorsement total of 2,622 loans, to a share of 6.9% with 3,667 loans.

Reverse Mortgage Funding, LLC (RMF) also grew both its full-year volume total and its market share, with volume rising 30% to 5,355 loans and market share expanding from 9.2% in 2020 to 10.1% in 2021. While all lenders in the top 5 recorded overall increases in full-year volume, some saw their market share recede slightly. With an 18% increase in volume to 17,096 loans, American Advisors Group saw its market share remain largely stable, dropping only 0.1% from 32.3% in 2020 to 32.2% in 2021.

Finance of America Reverse (FAR) and Liberty Reverse Mortgage are the two lenders in the top 5 that recorded drops in overall market share even as they managed to increase their volume in 2021 when compared to the year prior. FAR dropped from a 9.2% market share in 2020 to an 8.7% share in 2021, while Liberty went from 8% to 7.2% in the same period.

More variation in ranks 6-10

Things become a little more dynamic when looking at ranks 6-10 in the industry’s top performers. While four of the five companies holding these ranks maintained a place among them, specific rankings have shifted a bit as one of the top 10 lenders from 2020 is not present on the 2021 rankings.

That’s because the company that dropped off is One Reverse Mortgage, the former reverse mortgage division of the lender that used to be known as Quicken Loans and which retired that brand last year to expand on its popular Rocket Mortgage brand. In the final major story published by RMD prior to the outbreak of the COVID-19 coronavirus pandemic, representatives for the One Reverse parent company confirmed the organization’s exit from the reverse mortgage space.

The exit of a top 10 lender allowed others to fill a new void that had been created, though One Reverse’s early 2020 volume was enough to keep the company in the top 10 ranks for that year. Now, with the former lender’s volume working its way out of the rankings, this provided an opportunity for New Jersey-based Advisors Mortgage Group to enter the top 10. The new number 10 lender in the industry recorded 727 reverse mortgage loans in 2021 for a 1.4% market share.

Beyond the entrance of Advisors into the top 10, every other lender in the 6-10 positions save for one managed to grow both its endorsement volume and its market share in tandem. Longbridge Financial recorded an impressive 71% increase in total volume between 2020 and 2021, settling at 2,771 HECM loans for the year.

Fairway Independent Mortgage, however, saw an 11% reduction in its full-year volume to 1,688 loans, with a market share of 3.2%. It held a 4.3% share in 2020, but interestingly Fairway is also the only lender in the top 10 not to have California as its top state for business. For Fairway, its top state is Arizona. Fairway has also taken public positions regarding the industry’s current level of refinancing activity.

What the new reverse mortgage lender rankings mean

As has been well-documented, a major driver of 2021’s record reverse mortgage business came from HECM-to-HECM refinances according to data from the Federal Housing Administration (FHA). Refis comprised at or nearly half of all HECM volume for the year, the highest share it has had in overall volume since at least 2009. The “refi boom” is clearly a driver of the rankings for the year according to John Lunde, president of RMI.

“Refis were the most visible evidence of the macro effects benefiting the industry, namely rocketing home values and low interest rates,” Lunde says. “As we move forward, lenders can ride refis for as long as they last but keep in mind that those same forces are extremely positive for non-refinance volume as well.”

Fairway’s overall volume reduction in comparison to 2020’s data also shows that company taking a different tact when compared with other top 10 lenders, Lunde explains.

“[Fairway’s] 2021 volume shows the lowest HECM-to-HECM (H2H) refinance share and highest HECM-for-Purchase (H4P) share of the top 10 lenders, a clear sign of the difference in their approach,” Lunde says. “It sets them up very well for sustainable growth in a way that refinances don’t.”

In its Annual Report to Congress late last year, FHA similarly pointed out that historic levels of home price appreciation were a major contributor to the HECM book of business hitting positive territory inside the Mutual Mortgage Insurance (MMI) Fund for the first time since 2015. Additionally, however, Lunde notes that the reverse mortgage business should aim to avoid some mistakes that can be made on the forward side.

“I read recently that the forward industry seems to have collective amnesia every 2-3 years where the refi cycle lulls originators into thinking they don’t need to focus on non-refi efforts,” he explains. “I think that’s interesting and something we as an industry really need to steel ourselves against, since we don’t have the installed base of loans to refinance, but also have much farther to go in terms of general product awareness and receptivity among our potential customers.”

In reverse, the risk of industry atrophy is ever-present if the business remains focused on serving the same pool of borrowers, he says.

“While forward originators might have a bad year or two if they don’t plant non-refi seeds, we have a much more existential risk of not growing into the equity release product our customers need if we take our eye off the education and awareness ball,” he explains.

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