Why Banks are Exiting the Reverse Mortgage Market...

Consumers are likely to be confused with the recent exits from the reverse
mortgage market by Financial Freedom, Bank of America, Wells Fargo(wholesale) and
Seattle Mortgage. Happening all at once, the public might perceive
something negative is going on with the industry. The reasons are quite
different with one overriding factor - increased competition.

Financial Freedom parent One West never had their heart into the reverse mortgage
business. Bank of America has other problems and it was an opportunity to
shift an entire unit to deal with processing foreclosures.

The most significant factor, I believe, is increased competition from
independent retail loan originators supported by more wholesale options.
The pricing for reverse mortgages has come down considerably - all positive
for the senior. The introduction of the HECM Saver program and recent
limitations on loan originator compensation has leveled the field quite a
bit.

The differentiation of a trusted advisor is now is back to education,
quality advice and solid ethics - attributes large organizations have
trouble executing. As originators, we have an opportunity to educate our
clients and let the know - reverse mortgage options are here to stay!

For more on this shift, check out THIS article.