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Late last week Wells confirmed that it is leaving the sector, but noted that it will remain as a servicer. Its official departure date is
Wells’ exit from reverse mortgages comes four months after its closest competitor in the space,
According to figures compiled by NMN and the Quarterly Data Report, Wells dominated the reverse sector in the first quarter, funding
Although on the surface, the Wells news looks bad for the reverse industry,
“The demographics and wealth profile prospects for this business are still good,” he said. “But we also need home prices to stabilize.”
The rumors about Wells leaving reverses began circulating in March.
“The decision was made based on today’s unpredictable home values,” the
Earlier this year, the company had shut its wholesale production channel for Home Equity Conversion Mortgages, a product backed by HUD. Reverse mortgages, the company said, were just 2.2% of retail volume and 1.2% of overall volume.
Another contributing factor in Wells’ decision is the tax and insurance payment issue. A growing number of seniors are failing to make these required payments and as a result have fallen into default status on their HECM and subject to foreclosure.
In an interview done prior to the Wells announcement,
Roughly 1,000 employees are affected by the move and will be given opportunities to apply for other positions at Wells.