Bank of America will acquire 40,000 reverse mortgages with its purchase of a reverse mortgage business.
The Charlotte, N.C.-based company announced today an agreement to acquire the reverse mortgage business of Seattle Mortgage Co. The deal, subject to regulatory approval, is expected to close in the second quarter.
"This is in line with Bank of America's desire to grow its consumer real estate business by utilizing our significant advantages in size and scale," Floyd Robinson, president of Bank of America Consumer Real Estate, said in the press release.
BoA, which claimed to be the biggest U.S. home equity lender last year, had already launched a reverse mortgage program during November in Arizona, according to the statement. The acquisition will give it 400 more employees, including 200 sales associates in 25 states.
Seattle Mortgage, a subsidiary of Seattle Financial Group Inc. founded in 1995, is "one of the leaders in providing financial solutions for seniors," the announcement said. The company, with a reverse portfolio of 40,000 loans for $4 billion, markets reverse loans under the name Reverse Mortgage of America.
By stepping up its reverse mortgage position, the bank will be going head-to-head with the likes of IndyMac Bank subsidiary Financial Freedom Senior Funding Corp. -- which itself claims to be the country's largest reverse lender with $4.9 billion in reverse production last year.
Other reverse lenders include Live Well Financial Inc., LLS Financial and Wells Fargo Home Mortgage, the self-proclaimed largest retail originator of reverse loans.