NRMLA expects continued demand for reverse mortgages
The National Reverse Mortgage Lenders Association doesn't believe Wells Fargo's (WFC) decision to end its reverse mortgage business will be the death knell for the loan product. The banking giant canceled that line of lending, saying unpredictable home values and restrictions on the loans are making it impractical to continue in that segment. "All current Wells Fargo reverse mortgage borrowers will continue to be serviced and funds made available," said Peter Bell, president of the trade group. "Demand for HECM loans remains strong. In fact, the HECM program has evolved to meet the changing economic times with the recent introduction of the HECM saver, a new product that reduces costs and increases consumer protections." Reverse mortgages allow homeowners who are at least 62 years old to borrow against equity in their property without having to make monthly payments. The balance on the loan is not due until the borrower no longer occupies the home as a primary residence. NRMLA said ongoing demand for reverse mortgages prompted the association to work with the Department of Housing and Urban Development to develop procedures to evaluate borrower income and insure the ability to pay taxes and insurance on the property after the reverse mortgage deal closes. "It is anticipated (HUD) will be issuing a rule change in the future to provide HECM lenders with the discretion to make these necessary underwriting changes," the NRMLA said. Write to Kerri Panchuk.