After months of rumors, Wells Fargo & Co. — the nation's largest originator of reverse mortgages — made it official confirming that it is leaving the sector, but will remain as a servicer.
Its official departure date is June 30.
Wells's exit from reverse mortgages comes four months after its closest competitor in the space, Bank of America, announced that it was leaving the business.
According to figures compiled by National Mortgage News and the Quarterly Data Report, Wells dominated the reverse sector in 1Q, funding $1.28 billion in product — far ahead of its closet competitor.
The rumors about Wells leaving reverses began circulating in March.
"The decision was made based on today's unpredictable home values," the San Francisco-based bank said in a statement.
Earlier this year, the company had shut its wholesale production channel for 'home equity conversion mortgages' or HECMs, a product backed by HUD. Reverse mortgages, the company said, were just 2.2% of retail volume and 1.2% of overall volume.
Franklin Codel, the head of National Consumer Lending at Wells, said the bank "will continue to provide options for seniors who wish to determine ways to access the equity in their homes."
Roughly 1,000 employees are affected by the move and will be given opportunities to apply for other positions at Wells.