Australia: largest reverse mortgage lenders exit
What happens when reverse mortgage lenders suddenly disappear? Australia is instructive on what happens when lenders offering a needed loan to help seniors age in place suddenly disappear. Despite the strong criticism and negative media stories covering the loan, it would seem the need older homeowners down under remains. And despite increasing criticism of the program, one senior advocacy group laments the exit of the nation’s largest reverse mortgage lender Commonwealth Bank reports Reverse Mortgage Daily. Bankwest is also ceasing their reverse mortgage operations all which have left a handful of smaller lenders to offer the loan to Australia’s aging population.
Earlier in 2018, the Australian government opened discussions on the feasibility of offering government-backed reverse mortgages to all Australians over the age of 66 enabling them to age in place. Against the backdrop of a potential government product, the Australian Securities and Investments Commission opened an investigation into the financial health of reverse mortgages finding that 92% of over 100 files examined lacked any evidence that the broker or bank explained the risks to future financial security and repayment with the borrower.
Lender consolidation has complicated matters with five banks accounting for 99% of all reverse mortgages originated in the last two years. Why are Australian lenders exiting…