Wells Fargo, the nation's largest reverse mortgage lender announced in March that it was no longer handling reverse mortgages and has now left the business altogether.

Wells Fargo had 26.2 percent of the market share and the largest network of reverse mortgage professionals, according to an Inman News article.

Wells Fargo pulled out because it didn't like what lies ahead.  "HUD has been considering lowering the maximum borrowing amount for its reverse mortgage." writes Tom Kelly of Inman News.  "In addition, lenders are concerned that if taxes and insurance payments are not kept current on homes, they could be forced to foreclose on cash-strapped seniors. No lender is eager to do so."

Reverse Mortgages are a tax-free option for seniors who want to convert part of their home equity into cash without having to take out a new loan or sell their home.

Bank of America, Financial Freedom, and Seattle Mortgage have followed in Wells Fargo footsteps but seniors can still find lenders for a reverse mortgage and Home Equity Conversion Mortgage (HECM) loans.

"The bottom line is that anyone over the age of 62 who wishes to tap the equity in their home without making a payment to repay the debt will now have to show the ability to pay the property taxes and homeowners insurance needed to stay in the home." says Kelly. " While seniors have never had to qualify to obtain the "conforming" Home Equity Conversion Mortgage (HECM) insured by FHA, the writing is now on the wall if the industry has any hope of succeeding."

Read more at Inman News.

photo credit: Mosman Council

Posted in Real Estate Market Conditions, Headlines

Comment on this article

Name

Email
Your email address will not be displayed.

Site/Url
Your URL will be displayed.

Your vote

Poor Excellent

Comment text

Options

  Line breaks become <br />

  Remember me

  Allow users to contact you through a message form.

Captcha

Please enter the characters from the image above. (case insensitive)

Captcha code