Lenders Shift from Kitchen Table, Adapt to New Reverse Mortgage Landscape

Lenders may be moving away from the kitchen table model of originating reverse mortgages, and they are getting used to a new way of doing things without big, national banks in the mix. Looking back over recent months, Reverse Market Insight took a look this week into those shifts, as well as several others that have emerged. 

Highlighting three trends in reverse mortgages to date, RMI reported Tuesday on the state of the industry from several different perspectives.

New products are here to stay, enabling the market to serve different types of reverse mortgage borrowers, RMI writes. Previously, just one, standard product served senior borrowers. Today, the Saver helps borrowers looking to meet financial planning needs and the HECM Purchase allows borrowers to purchase a new home with a reverse mortgage. 

Fixed rate reverse mortgages have comprised 2/3 or more of total volume for more than two years; a change that happened in less than six months, RMI writes.

But another, more recent trend has emerged in the wake of several large lenders having exited the business: a move away from the kitchen table method of originating reverse mortgage loans.

“Where this business was once powered by “kitchen table” salespeople at  Wells Fargo, Bank of America, Metlife and Financial Freedom, we saw 2 of the top 3 lenders in March were independent reverse mortgage lenders exclusively originating through their call centers,” RMI writes. 


Above all, however, RMI notes the decline in volume the industry has experienced in recent months, and is likely to continue to see through the sustained downturn in home prices. 

“This volume decline is not groundbreaking news to anyone since we’ve been reporting on it for years now, but it does highlight the need for everyone to adapt,” RMI says. 

View the full report from Reverse Market Insight.  

Written by Elizabeth Ecker

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