It has been an eventful year for the reverse mortgage industry. From losing lenders, fighting a battle over loan officer compensation and seeing the first-ever financial assessment for borrowers, RMD compiled the top-10 most read stories this year. Hot topics include lender exits and loan officer compensation, in order from most- to least-read.
#1. February 4: Bank of America to Exit Reverse Mortgage Business. Bank of America tells employees it will leave the reverse mortgage business, citing a need to focus on its core mortgage business. The company continued its reverse mortgage servicing business until it sold the servicing rights to Nationstar in December.
#2. June 16: Wells Fargo, Largest Reverse Mortgage Lender to Exit Retail Business. Wells Fargo confirms it will no longer offer reverse mortgages to customers, stating that unpredictable home values and HECM program limitations make it difficult to determine seniors’ abilities to meet the obligations of homeownership.
#3. March 21: OneWest Exits Reverse Mortgage Business, Shuts Down Financial Freedom. The former industry mainstay shuts down all reverse mortgage channels, citing the regulatory environment and desire to focus on the bank’s core businesses.
#4. June 19: Leaked Wells Fargo Email Provides More Info on Reverse Mortgage Exit. An email obtained by American Banker shows that Phil Bracken, an executive vice president of Wells Fargo Home Mortgage, was worried that the Department of Housing and Urban Development would force it to foreclose on senior citizens with delinquent reverse mortgages insured by the Federal Housing Administration.
#5. April 1: Federal Reserve’s Loan Officer Compensation Rule Delayed. Just for a few days, the industry waited as the U.S. Court of Appeals granted a stay on the Fed’s loan officer compensation rule. Industry groups had sued the Fed against the rule, but ultimately lost and the rule was implemented within a week of the initial implementation date.
#6. March 1: Wells Fargo to Exit Wholesale Reverse Mortgage Business. Wells Fargo exited the wholesale business, and cut off applications to its broker channel after March 18th.
#7. April 5: Groups Reply to Fed on LO Compensation Rule Delay; Court Lifts Stay. The rule goes into immediate effect as a result of the court stay being lifted by the U.S. Court of Appeals.
#8. February 8: Bank of America Reverse Division is Profitable, Still Decides to Close it Down. Speculation swirls about Bank of America’s decision to leave the business, despite showing profits from its reverse mortgage business arm.
#9. November 4: MetLife Makes History, Implements Financial Assessment for Reverse Mortgages. MetLife implements a financial assessment for reverse mortgage borrowers that considers whether they are willing and able to pay property charges. Other lenders say they will follow after MetLife’s guidelines go live.
#10. March 30: NAMB’s Loan Officer Compensation Lawsuit Heard; Denied. The suit against loan officer compensation is heard, but denied in court, before the Court of Appeals places a stay on the rule, extending its implementation date by less than a week.
Written by Elizabeth Ecker