After deciding to get a reverse mortgage, the next logical step would be to determine the type of lender to work with and this is why this article takes a look at banks that offer reverse mortgages.
It is possible that you’ve had some history with a regional or national bank regarding a mortgage loan given that a number of notable banks are known to include mortgage lending services as a part of their services.
Also, there are a number of non-bank mortgage lenders that are well known and you just might have had a history with them regarding mortgage lending too.
When it comes to reverse mortgages, while a number of banks actually offer this service, some of the biggest banks today do not. Major national banks such as Bank of America, Chase and Wells Fargo do not.
However, upon inquiry, you may get a referral from a representative of these banks regarding a loan originator that isn’t a part of the bank of course.
Categories of Reverse Mortgage Lenders
There are two main categories of lenders: banks and non-banks. Banks, in typical fashion, take investments or deposits from customers and lend this money to other qualified customers who come calling.
Non-bank lenders or finance companies get their funding through other means.
The distinct difference that sets banks and non-bank finance companies apart is that banks have a lot more regulation to deal with. In addition, the Federal Deposit Insurance Corporation (FDIC) is in the picture and they carry some insurance for customer deposits from there.
On the flip side, there are certain reverse mortgage lenders that occupy both categories.
Do Banks Offer Reverse Mortgages? Why?
Banks that have a reverse mortgage department in them can offer the loan. However, most big banks currently don’t offer reverse mortgages. Some big banks did offer in the past. For instance, banks like Wells Fargo and Bank of America once occupied the position of being among the most massive reverse mortgage lenders.
In the aftermath of the financial crisis, both banks decided to take reverse mortgages off of their list of services being offered.
In February 2011, Bank of America was the first to announce the discontinuation of reverse mortgages and was closely followed by Wells Fargo in the same year.
Bank of America claimed that reverse mortgages were not among core businesses being offered by the company at the time.
In 2010 alone, Wells Fargo recorded over 16,000 reverse mortgages. Before bowing out of the scene, they stated that given the level of unpredictability in home prices, it could be pretty difficult to know without any reasonable doubt that reverse mortgage borrowers would be stable enough to meet the obligations that accompanied the loan.
Banks That Offer Reverse Mortgages
Although most banks do not offer reverse mortgage services, there are still a few that do offer. Some of these banks include Firstbank, Quontic Bank, The Federal Savings Bank, and Townebank among others.
One of the things to notice is that none of the renowned banks are a part of this list and is why most people opt for non-banks to get their reverse mortgages.