Wells Fargo to move reverse mortgage lending away from brokers
Wells Fargo ($39.88 0.62%) will no longer offer reverse mortgages through its wholesale or broker channel after March 18, the bank said Tuesday.
Wells will continue originating reverse mortgages through its retail or direct-to-consumer channel, where most of the loans are written for the bank. A spokesperson for the bank said the change comes after a review and evaluation of volume and goals for 2011, but this will not mean the bank will originate fewer reverse mortgages for the year.
A reverse or Home Equity Conversion Mortgage allows the borrower, who must be at least 62 years old, to convert a portion of the equity in the home for cash. No repayment is required until the borrower no longer uses the home as a principal residence or does not meet the obligations of the loan, often in the event of death.
Wells was the largest HECM lender in 2009. It originated $5.7 billion in HECM loans that year for a 19% market share. The next closest was Bank of America ($13.43 0.07%), which originated $3.1 billion in HECM loans, but the bank announced in February that it would exit the reverse mortgage business.
"Wells Fargo team members who support wholesale reverse will transition to support reverse mortgage loans through our retail channel," the spokesperson said.
Write to Jon Prior.
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