ÌÇÐÄÆƽâ°æ

As of October 2024, Wells Fargo was the leading reverse mortgage company of all times in the United States, with nearly ** loan originations. The Home Equity Conversion Mortgage (HECM) is the name given to the reverse mortgages insured by the U.S. Federal Government. Meanwhile, Mutual of Omaha Mortgage Inc was the largest lender by number of HECM originated in 2023. 

What is a reverse mortgage?

A reverse mortgage allows homeowners aged 62 or older to receive a loan based on the home equity they have established – typically up to ** percent of the property’s value. Unlike a traditional mortgage where monthly repayments are made, a reverse mortgage loan is only repaid when the borrower moves from the property or passes away. By this time, the borrower will owe more than what they originally borrowed because fees and interest charges are added to the balance of the loan each month. The number of HECMs in the United States has declined since 2022, when it rose notably.

Big banks quit reverse mortgage business

Wells Fargo and Bank of America are just two of the big firms that used to offer reverse mortgages but pulled back from the business. Financial services firm Wells Fargo cited an unpredictable housing market and the creditworthiness of borrowers as reasons for no longer accepting reverse mortgage applications. Earlier in 2011, Bank of America – which also used to be among the leaders in the business – also exited the reverse mortgage business.