B of A to quit offering reverse home loans

B of A declared on February 8 that they will be pulling themselves out of reverse mortgages. In the past year, reverse mortgages have proved troublesome. The amount of money banks can make on the product has been dropping precipitously. A rising number of reverse home loans are also ending up in technical default.

Reverse mortgages in Bank of America's history

Bank of America first started offering reverse mortgages in 2006. Then, B of A bought Reverse Mortgage America. This occurred in 2007. In 2008, B of A purchased Countrywide Financial Corporation and took over its mortgages and reverse mortgage operations in Reno, NV, and around the nation. The 600 employees can be moved to other places in the financial institution in early 2011 with Bank of America because all reverse mortgage operations are being shut down. You will find several applying for reverse mortgages or holding them currently. All these individuals can be serviced by Bank of America still.

Reverse home loan business less common

There has been a huge drop in reverse mortgages where homeowners sell their home back to the bank. The number of new reverse mortgages written dropped by more than a 3rd in 2009, and dropped again last year. You will find homeowners in default on reverse home loans technically also. There seem to be more and more. It is really hard to get out of a reverse mortgage default. Typically this means that you haven't been paying taxes on the property or are not keeping it maintained as you are intended to. Many seniors are facing the choice of taking out no fax payday loans to keep their home maintained or lose their main source of secondary income.

Why it is sometimes good to get a reverse mortgage

Less and less individuals seem interested in Reverse mortgages. Reverse mortgages are not lasting long enough for several senior citizens. There is also the issue of low maintenance on the home causing a default. Getting equity out of a home is important to some that like reverse mortgages. They don't have to try to sell it either. In short, reverse home loans may be helpful at times, but they are often extended beyond the meant use of the product.

Citations

Miami Herald

miamiherald.com/2011/02/03/2048507/reverse-mortgages-going-to-default.html

Nasdaq

community.nasdaq.com/News/2011-02/bofa-getting-out-of-reverse-mortgages.aspx?storyid=56592