Reverse mortgage lenders are hot right now. Even with all of the negative press our industry has received over the past few months, companies are still acquiring reverse mortgage lenders. I cant say I’m surprised either… as we all know succeeding in the reverse mortgage business requires a different approach than the forward world and it’s easier to acquire a reverse mortgage company vs. starting from scratch.
Within the past year, there has been 5 different announcements of reverse mortgage lenders being acquired. Below is a list of them which should give you a better overview of what has happened:
- 6/29/07 – Bank of America Completes Seattle Mortgage Acquisition
- 7/19/07 – Genworth Acquires Liberty Reverse Mortgage, Inc.
- 8/6/07 – KBC Acquires Lender Lead Solutions Parent Company
- 4/3/08 – MetLife Buying Reverse Mortgage Lender
- 5/2/08 – 1st Reverse Bought by WSFS
Four out of five of the companies acquired are all currently in the top 10 list of lenders in terms of HECM production. Among the current top 10 HECM lenders, the only independent reverse mortgage lender that remains is Omni Home Finance. I’m just speculating here but I wouldn’t be surprised if they are the next company we hear about being acquired.
But how much are people paying for reverse mortgage lenders? The only acquisition that gave an actual figure was the Genworth/Liberty deal, which according to the press release was $50 million at closing along with potential additional performance-based financial consideration. Does that mean that a company with more production than Liberty (ie.Omni) will fetch more than the Genworth deal?
No other company has disclosed what they paid, so it leaves the door open… how much are reverse mortgage lenders worth? Any ideas?
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