Written by Jessica Linn Guerin, as originally published in The Reverse Review.

In late April, MetLife announced its exit from the reverse mortgage business. While not easy to digest, the move was anticipated by players accustomed to the industry’s persistent evolution.

The insurance provider announced the sale of its servicing portfolio to Texas-based Nationstar Mortgage, the same company that bought the rights to Bank of America’s reverse mortgage servicing last year. One of the largest mortgage servicers, Nationstar is backed by Fortress Investment Group, a New York-based hedge fund and private equity group.

MetLife was once the largest reverse mortgage provider in the U.S. with 23 percent of the market in the first quarter of 2012. But banking operations generated less than 2 percent of MetLife’s total earnings and subjected the company to strict federal oversight. In an effort to refocus on its core purpose as an insurance provider—and to free itself of regulatory burdens—MetLife began shedding its banking operations, selling its depository bank business to GE Capital in December and its warehouse finance unit to EverBank in February.

MetLife’s exit has left industry participants poised to capture the market share that the company has left behind. Some are bracing themselves to handle the inevitable uptick in volume, while others are snatching up some of the 500 former MetLife staffers. Most players seem to view the exit as a great opportunity for more specialized lenders to get a bigger piece of the pie.

However the events turn out, one thing is certain: The reverse mortgage business is here to stay, with or without big banks. With more and more baby boomers entering retirement every day, the demand for the product is greater than ever before. The exit of a leading player is a sad loss for the reverse community, but the industry will no doubt continue to thrive as a business dedicated to helping seniors achieve financial security.

THE INDUSTRY REACTS Gregg Smith COO, One Reverse Mortgage The industry should not experience a gap in production due to the departure of MetLife… One Reverse Mortgage expects to see an increase in our originations and welcomes the opportunity to educate potential clients on the benefits of the program.

Mike Kent Senior vice president, RMS MetLife is leaving behind about $150 million to $160 million a month in production. We have reached out to our clients with assurances that we can still provide the liquidity they need. I think it presents a lot of opportunity on the retail side.

Pete Engelken CEO, Genworth Financial Home Equity Access It’s unfortunate… but it does not change the fact that the HECM products are better than ever… The reverse mortgage industry has proven that when consumer demand exists, specialty lenders, brokers, community banks, and credit unions will fill the gap.

Torrey Larson CEO, Security One Lending The departure was long suspected, but it was still a shock… Privately held companies now have the advantage over the larger ‘branded’ firms, which is unique. This is the precise moment by which lenders can demonstrate their ability to manage capacity and growth.

Peter Bell President, NRMLA The whole MetLife team made a major contribution to the culture of the industry and was generous with their time and support of NRMLA. We expect and look forward to those leaving MetLife to move elsewhere within the industry and continue to contribute.

Reza Jahangiri CEO of American Advisors Group Reverse mortgages no longer align with the prerogatives of a Fortune 100 institution. Even though [they all] seemingly had healthy RM business channels, it was too small a revenue generator to offset the goal to refocus on core lending strategies… Small to mid-sized public companies and private entities are now the primary liquidity sources for the program.