Reverse Mortgages meet the Big Firms & Banks

SAN FRANCISCO — After years of being heralded as the next big thing in banking, reverse mortgages have come into their own, morphing from a mom-and-pop industry to big business in just the last six months.

Genworth Financial Inc. of Richmond, Va., signed a deal in July to acquire the No. 4 player in the reverse-mortgage industry, Liberty Reverse Mortgage Inc. of Rancho Cordova, Calif. A month earlier, Bank of America Corp. acquired the No. 3 player in the field, the reverse-mortgage business of Seattle Mortgage Co.And in May, the embattled Countrywide Financial Corp. of Calabasas, Calif., the nation’s top mortgage originator, entered the market with its first reverse-mortgage product.

The moment is right for big companies to discover reverse mortgages because of the ever-growing population of baby boomer retirees, according to industry executives.

“It’s the right opportunity, right time given our core mission,” said Ron Cordes, chairman of AssetMark Investment Services Inc., a Pleasant Hill, Calif.-based subsidiary of Genworth. “From accumulation to distribution, that’s the big theme at Genworth.”

But some industry observers believe that big banks are motivated by more than (more…)

Written by charles dennis on September 5th, 2007 with no comments.
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