Back in the early 2000s, much of the volume of reverse mortgages in the U.S. was attributed to big banks, including Bank of America. Today, that landscape has changed.  Bank of America began in the reverse mortgage space through a small retail channel before ramping up its operations with the acquisition of Seattle Mortgage’s reverse mortgage business in 2007.

The company then grew into both a retail and wholesale lender, offering HECM loans through its retail branches and closed loans originated by mortgage brokers across the country.  Before exiting the market, Bank of America was the second-largest retail lender and the second-largest wholesale lender, with more than 18% market share in wholesale.

Around the time of its exit, many banks and mortgage lenders were changing their operations due to the Great Recession and the impact it had on the housing market.

Why did Bank of America stop offering reverse mortgages?

When Bank of America announced it would no longer offer reverse mortgages, the bank’s executives cited a focus on the company’s “core” offerings and moving “the unit’s operational resources into other critical areas serving customers.”  At the time, BofA continued serving its existing customers who had already taken out reverse mortgages.

“We made the strategic decision to exit the reverse business due to competing demands and priorities that require investments and resources be focused on other key areas of our business,” Doug Jones, Consumer Sales and Institutional Mortgage Services executive for Bank of America Home Loans said at the time.

Around the same time, Bank of America also announced it was selling its Balboa Insurance company, with its exit from reverse mortgage lending as an additional step to focus on core operations.

MARKET FACTORS: 

• The Great Recession started in 2007-2008, leading to uncertain home values and home price declines across the U.S.
• Bank regulations increased as a result of the Dodd-Frank Act, passed in 2010

Will Bank of America Bring Back Reverse Mortgages?

There’s nothing stopping Bank of America from re-entering the reverse mortgage space, and many have speculated that big banks could come back one day.  At present, most of the best reverse mortgage companies are non-bank lenders, including All Reverse Mortgage®, American Advisors Group, Finance of America Reverse, One Reverse Mortgage, and Reverse Mortgage Funding.

Many existing banks are in the reverse mortgage space today; they tend to be regional or small national banks with a federal charter. Banks such as M&T Bank, Quontic Bank, Magnolia Bank, and Resolute Bank, among many others, continue to offer reverse mortgages.

While prospective borrowers cannot submit a reverse mortgage application at a Bank of America retail branch today, loan originators at BofA may be able to refer customers to trusted reverse mortgage professionals who can help.

Bank of America Reverse Mortgage: Pros and Cons

Bank of America Reverse Mortgages Originated

Summary

• Bank of America, at one time, was a major lender in the Home Equity Conversion Mortgage (HECM) market 
• The bank operated both retail and wholesale reverse mortgage channels
• Bank of America leadership decided to exit the reverse mortgage business in 2011

Where to Get a Reverse Mortgage?

There are many active lenders in the reverse mortgage space today — including both banks and non-bank lenders — as well as brokers who can help prospective borrowers navigate the different loan options and available interest rates.

A good place to begin is gathering a few pieces of information, including your age (and the age of your spouse, if you are married), and your home address, so that a reverse mortgage calculator can give a rough estimate of the amount you may be able to borrow.

ARLO recommends these helpful resources: 

• Banks Offering Reverse Mortgages Retreat