Although the two largest reverse mortgage banks said they would stop offering loans for senior home equity, the reverse mortgage program did not materialize. There is no doubt that HUD and the major players who are leaving the game, Bank of America and Wells Fargo will still provide the plan and will still honor the existing HECM loan.
In the macro plan, the reverse mortgage lender will be extremely determined to oppose the review and still provide a federal insurance plan. We do anticipate some of the possible changes in the industry and its regulations, including the new number one player MetLife.
Why does Bank of America stop offering reverse mortgages?
Bank of America is one of the largest banks to offer HECM program loans, and there are good reasons to give up on these types of home equity loans. The National Bank expressed its hope to focus on helping troubled homeowners by using their resources to modify traditional mortgages. Does Bank of America try to clean up its mortgage portfolio?
Why Wells Fargo stopped offering reverse mortgages
Although BOA has stated that they are trying to focus on doing the right thing, the most important thing is the value of housing. Wells Fargo has said that it is not surprising that today's housing market is so unpredictable. If the value of the home is still much lower than the current price, how can you lend money based on the value of the home? Yes. Instead, they focus on cleaning up bad loan habits and conflicts of interest that may arise in older communities in the future.
What does this mean for MetLife and other reverse mortgage lenders?
Obviously, this is a huge change in the industry, but that doesn't mean the plan will close or stop soon. In contrast, HECM loans are now largely handled by MetLife, the third-largest bank before Wells Fargo and Bank of America stopped providing services. It is likely that the reverse mortgage industry is cleaning itself up by consolidating it into a tight mortgage group.
Reverse mortgages have been around for a while and have not gone anywhere. They have the support of a president like Ronald Reagan and are used by many older people to improve their quality of life without alternatives. There is a lot of speculation about services and how to provide services to older people recently. Therefore, it seems that the regulations may become strict, but it seems that HUD will not shut it down.
After all, if you are a senior homeowner and you have been working on your own house for the rest of your life, now your investment value is not as great as it used to be, but what choices do you have while trying to maintain economic growth? Not to mention that many older people are unable to seek help from their children because they have lost their homes. When you look at the home equity conversion mortgage from the perspective of the person providing the plan [HUD], it's not that bad.
Orignal From: Reverse mortgage lenders decrease but reverse mortgages remain strong
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