Within less than a year both Bank of America and now Wells Fargo have exited reverse mortgage market. The reasons for the departures may have more to do with infrastructure set-ups, being able to achieve profitability, and getting in compliance with changing regulations from the Department of Housing and Urban Development (HUD) than with the product itself. In the past reverse mortgages received heavy criticism for high fees and aggressive sales tactics which may have pushed some seniors into opting for a reverse mortgage when they otherwise may not have. The aura surrounding reverse mortgages has changed quite a bit as heavy regulation has been introduced along with the fact that social security, private pensions, and 401K’s are not sitting as strong as they have in the past. The bottom line is reverse mortgages are still a good option for seniors to consider in order to achieve continued solvency.
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