Wells Fargo announced in March it would no longer accept reverse mortgages through its broker network, and last week it got out of the industry altogether.
Wells Fargo, the nation’s largest reverse mortgage lender, was the kingpin in the industry in more ways than one. It had 26.2 percent market share, according to the latest data from Reverse Market Insight, the largest network of reverse mortgage professionals and a money-making operation.
It simply did not like the road ahead.
HUD has been considering lowering the maximum borrowing amount for its reverse mortgage. 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.
A reverse mortgage historically has enabled senior homeowners to convert part of the equity in their homes into tax-free funds without having to sell the home, give up title, or take on a new monthly mortgage payment. Reverse mortgages are available to individuals 62 and up who own their home.