Wells Fargo & Co., which ranks as the biggest reverse mortgage lender in the country, is getting out of the wholesale reverse mortgage business. It’s the second big exit from the reverse mortgage market in as many months.
Based on wholesale and retail originations, Wells Fargo Bank., N.A., reigns as the biggest originator of home-equity conversion mortgages. Reverse Market Insight reported that Wells funded nearly 2,000 HECMs in December — more than any other HECM lender.
But wholesale HECM production only accounted for 152 of December’s fundings at the bank.
In a statement Tuesday from Wells Fargo Home Mortgage spokeswoman Veronica Clemons, the company said it has decided to stop offering reverse mortgages through its wholesale lending channel. The decision was made following a “detailed review and evaluation of volume and goals for 2011.”
New applications will continue to be accepted until March 18.
The move doesn’t impact retail reverse mortgage originations, which will continue to be made through its direct-to-consumer channel “where most of these loans are originated for our company.”
Impacted wholesale employees will be moved to the retail reverse mortgage division.
The move by Des Moines, Iowa-based Wells Fargo Home Mortgage comes less than a month after Bank of America Home Loans said it would exit the reverse mortgage business entirely.
Calling the exit a “strategic decision,” BofA attributed the move to “due to competing demands and priorities that require investments and resources be focused on other key areas of our business.”
BofA was the third biggest HECM originator in December.