Wells Fargo is exiting the reverse mortgage business, according to a company press release.
The San Francisco-based bank and mortgage lender said it will discontinue the loan origination of Home Equity Conversion Mortgages (HECM) on June 30, 2011.
After that date, the company will no longer accept reverse mortgage applications, though it will continue to service existing loans for clients.
The company got into the reverse mortgage game back in 1990, and as of 2010, the reverse mortgage business accounted for roughly 2.2 percent of the bank’s retail mortgage volume and about 1.2 percent of overall mortgage volume (which includes the mortgage broker and correspondent channels).
Wells Fargo has been the top mortgage lender in the country for five consecutive quarters.
The bank said it was exiting the business “based on today’s unpredictable home values along with the restrictions associated with reverse mortgages that make it difficult to determine seniors’ abilities to meet the obligations of homeownership and their reverse mortgage, e.g., payment of property taxes and homeowners’ insurance.”
In March, the AARP sued HUD over a rule change related to reverse mortgages that led to foreclosure for certain surviving spouses.
And earlier this year, both Bank of America and OneWest Bank exited the once-lucrative reverse mortgage lending business.
Wells Fargo Home Mortgage customers who currently have reverse mortgages can call the company at 800-472-3209 if they have any questions regarding the change.