Financial Freedom Challenges Wells Fargo in HECM Loans
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Wells Fargo and Financial Freedom have long been the “titans” of the reverse mortgage industry.
Financial Freedom is said be the largest reverse mortgage lender.
A recent Mortgage Banking article stated that Financial Freedom closed “close to 49,000″ reverse mortgages in 2006 (including both FHA loans and Financial Freedom’s proprietary loans) and claims to have roughly 50% of the reverse mortgage market share.
Wells Fargo, on the other hand, has long been the number one lender when looking strictly at FHA home equity conversion mortgages (HECM). HECMs are the most popular type of reverse mortgage and, generally, the product used by owners of homes valued under $400,000.
However recent data show that Wells Fargo’s lead in the HECM market is gradually slipping. In 2006, Financial Freedom accounted for 8,233 HECMs - about a third of the 25,391 HECMs originated by Wells. But through the first seven months of this year, Financial Freedom has completed 7,609 HECMs, or 57% of Wells Fargo’s 13,421 total.
Looked at another way, the monthly average HECM production for Wells has dropped from 2,116 in 2006 to 1,917 thus far in 2007. Meanwhile, Financial Freedom’s monthly average has zoomed 58% from 686 to 1,087. The good news for Financial Freedom is also showing up in quarterly financial results as commented on at Reverse Mortgage Daily.
It will be very interesting to see how this plays out in the months ahead and to what extent other players are able to climb to the top.
|
HECM Reverse Mortgage Volume
Wells Fargo vs Financial Freedom |
|||
|---|---|---|---|
|
Month |
FINANCIAL FREEDOM |
WELLS FARGO |
FF as % of Wells |
| Jan-06 | 661 | 1,631 | 40.5% |
| Feb-06 | 675 | 1,799 | 37.5% |
| Mar-06 | 828 | 1,867 | 44.3% |
| Apr-06 | 570 | 2,105 | 27.1% |
| May-06 | 816 | 2,467 | 33.1% |
| Jun-06 | 642 | 2,409 | 26.7% |
| Jul-06 | 341 | 2,300 | 14.8% |
| Aug-06 | 644 | 2,222 | 29.0% |
| Sep-06 | 557 | 2,287 | 24.4% |
| Oct-06 | 888 | 2,438 | 36.4% |
| Nov-06 | 687 | 1,976 | 34.8% |
| Dec-06 | 924 | 1,890 | 48.9% |
| 2006 Total | 8,233 | 25,391 | 32.4% |
| 2006 Avg | 686 | 2,116 | 32.4% |
| Jan-07 | 947 | 2,064 | 45.9% |
| Feb-07 | 1,184 | 1,687 | 70.2% |
| Mar-07 | 1,428 | 1,780 | 80.2% |
| Apr-07 | 902 | 1,679 | 53.7% |
| May-07 | 1,189 | 2,176 | 54.6% |
| Jun-07 | 738 | 2,127 | 34.7% |
| Jul-07 | 1,221 | 1,908 | 64.0% |
| 2007 Total | 7,609 | 13,421 | 56.7% |
| 2007 Avg | 1,087 | 1,917 | 56.7% |
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