Seattle Mortgage Closing Reverse Mortgage Division

NewImageLess than a year after coming back into the reverse mortgage business, Seattle Mortgage said it will close the division by the end of February.

An affiliate of Seattle Bank, the operation was hampered by the bank as it struggled to raise additional capital to appease federal regulators.  Reports show it’s close to raising $50 million to re-captialize the bank and as part of the process, the company decided reverse mortgages were not a core business.

“The bank has reviewed all active programs upon recapitalization of the organization.  As part of that process we chose to retain those we feel are core to our business objectives overall while exiting others not meeting those needs,” said Patrick F. Patrick, CEO of Seattle Bank in an email to RMD.  “We enjoyed being involved with the Reverse Mortgage business over the years and especially the relationships developed as part of the process.”

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Last March, the company hired Sarah Hulbert back to re-build its reverse mortgage business after it was sold to Bank of America in 2007.  Hulbert brought group of employees with her and told RMD she hopes to find the team a new home as part of a different lender.  “I am pleased to say there are several organizations who have expressed interest,” she said.

Seattle endorsed 54 HECM loans in 2010 according to HUD data.  For more information, check out its listing on ReverseBase.

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  • Although it really doesn’t matter now, because Seattle Mortgage has jettisoned the Reverse business, but for those few, loyal employees that seek accuracy in this article, I want to say that SMC never got entirely out of the RM business, after the sale of RMOA to BofA. Before RMOA, there were SMC reverse mortgage employees and LOs. With the development of RMOA, a few LOs stayed under the umbrella of SMC, and didn’t get folded into RMOA. So, upon the sale to BA, those few, tireless and apparently unsung LOs stayed with SMC and actually originated a fair amount of loans and contributed to the profits of SMC.
    Sarah came back to SMC a year ago, to increase our regional presence; SMC didn’t come back to the reverse mortgage business, as our little band was still in it.
    But in the scope of things, this is analogous to the discussion at the morgue, over the dead body… Did our dead person die because his heart stopped or because he quit breathing. Who knows or cares, let’s just say he’s gone because the family pulled the plug.

  • First we have Bank of America, and now Seattle Bank exiting the business because reverse mortgages are not part of their “core business”.

    I sure don’t like where this is heading!

    Hopefully, Sarah and her team will land some place soon that will appreciate what they can provide.

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