Wells Fargo Leaves The Reverse Mortgage Market

Wells Fargo is disproportionately in the mortgage business and is much more vulnerable to fluctuations in that market than the other major banks.

To limit that exposure, Wells Fargo is gradually pulling back from various facets of the mortgage business.

The private market tends to react quickly to changing conditions.

Bloomberg reports:

Wells Fargo & Co. (WFC), the largest U.S. home lender, said it was exiting the business of reverse mortgages because of the possibility that property values will decline further, displacing as many as 1,000 employees.
“The decision was made based on today’s unpredictable home values,” the San Francisco-based lender said today in a statement distributed by Business Wire.
Reverse mortgages allow retirees to create a lifetime stream of income by tapping the equity in their homes. Lenders are repaid from the sale of the home when the borrower dies or moves. Bank of America Corp., the second-largest U.S. home lender, said in February it was retreating from the business because of “competing demands and priorities” at the Charlotte, North Carolina-based company.

About Luke Ford

Raised a Seventh-Day Adventist at Avondale College in Australia, Luke Ford moved to California in 1977. He graduated from Placer High School in 1984, reported the news at KAHI/KHYL radio for three years, attended Sierra College and UCLA, was largely bedridden by Chronic Fatigue Syndrome for six years, and converted to Judaism in 1993. From 1997-2007, Luke made his living from blogging. Living by Beverly Hills (Alexander90210.com), he now teaches the Alexander Technique (moving the way the body likes to move). Lessons cost $100 each and last about 45 minutes. In 2011, Luke completed a three-year teaching course at the Alexander Training Institute of Los Angeles. His personal Alexander Technique website is Alexander90210.com. Luke is the author of five books, including: » The Producers: Profiles in Frustration » Yesterday’s News Tomorrow: Inside American Jewish Journalism
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