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Generation Mortgage Co., an Atlanta-based reverse mortgage banker, is exiting the Home Equity Conversion Mortgage origination business. The company said in a statement it will continue to service these loans.
“The decision to exit the origination business was not an easy one, but was made inevitable by the wave of recent regulatory changes,” said Colin Cushman, CEO of Generation Mortgage, in that statement.
“As a result of those changes, the industry has seen a reduction in the number of units, as well as a reduction in loan balances, significantly reducing origination revenues while increasing expenses.”
According to data from Reverse Market Insight, a consulting firm, Generation was the nation’s seventh largest reverse mortgage lender for the 12-month period ended Sept. 30, with 1,591 units.
The company’s statement said Generation will fund all loans in progress.
Generation is just the latest large HECM lender to decide to exit this space in recent years. Bank of America, Wells Fargo, Seattle Mortgage, Financial Freedom, EverBank, Genworth and MetLife all were at one time among the larger originators of these loans, if not the largest, and all exited the field for such reasons as higher costs, regulatory risk and the reputational risk of foreclosing a home on a senior citizen.
A request for further comment from Generation is pending.