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It’s nothing to gloat about. Quite frankly it came as a shock when Wells Fargo promptly exited stage right from the reverse mortgage business, especially for their employees. Two major banks departing is not a sign that the proverbial ship is sinking, nor are the remaining players rearranging furniture on the upper decks. With more details emerging it appeared to be a pure business decision…risk versus reward.
The question that remains is just how quickly will the survivors capture the market vacated by Wells? Some lenders are positioned to grow quickly or are scalable. Richard Mandell, Vice President of One Reverse Mortgage said —- for us it is a real opportunity—and added—we are in a position to grow quickly.— Others , like First National Bank, have a unique advantage not having to go through the arduous licensing process for loan officers. This positions them to quickly recruit and activate staff , some from Wells perhaps, to aggressively pursue the void left by Wells. A point to ponder through all of this is how will the previous borrowers who approached Wells Fargo through their bank branches feel about reaching out to smaller lenders and brokers?
The branch distribution model is a natural for many seniors who prefer dealing with their own financial institution or trust large brand names such as Wells Fargo. It’s the shopper who likes going to the brick and mortar building and desires face to face interaction. It should be interesting to see how smaller and major lenders leverage this opportunity and how prospective borrowers respond who have traditionally sought out reverse mortgages from their bank in years past. How do you think the remaining players in the market will grab the market share left by Wells Fargo? Leave your thoughts in the comment section below.
NRMLA meets with Consumer Financial Protection Bureau
It’s better to get your two cents in before the fact rather than bemoan the result later down the road. Even more so when you are speaking to an agency who will have direct oversight and regulation for your industry. NRMLA –the National Reverse Mortgage Lenders Association–has taken a proactive role in working with the newly created Consumer Financial Protection Bureau to shape a reverse mortgage specific disclosure and discuss reverse specific issues. That’s good news because the CFPB must report to Congress within one year with it’s recommendations on reverse mortgages and is also reshaping mortgage disclosures. The Consumer Financial Protection Bureau’s new simplified mortgage disclosures may ultimately work well for traditional mortgages but will be a hard fit for HECMs. Peter Bell and Steve Irwin said getting a reverse mortgage to fit into the new disclosure would be difficult and suggest a specific disclosure for the product.