Wells Fargo Reverse Mortgage Review (2023 Update)

October 6, 2021

By Michael G. Branson Edited by Cliff Auerswald 22 comments

Many years ago, some of the biggest banks in the nation offered reverse mortgages. Among them, Wells Fargo was one of the largest lenders in the U.S. Home Equity Conversion Mortgage (HECM) market. Today that is no longer the case.

Wells Fargo was at one time the largest reverse mortgage lender in the country.

It was only a short time later that the company decided to close its reverse mortgage business, leading to an unexpected timeline of events:

2010: Wells Fargo reaches a staggering 25% market share
2011: Wells Fargo decides to exit the reverse mortgage business

WF Pros and Cons

PROS	CONS
Services own loans	Sold their reverse mortgage servicing portfolio to Champion Mortgage and no longer services the loans they originated
5,000 branches across the US	Government actions and billion dollar fines by the CFPB have tarnished consumer trust
Approved by HUD - Housing and Urban Development	No longer provides reverse mortgage lending services

WF Reverse Mortgages Originated

Year	Loans	National	Market Share
2006	6,303	N/A	N/A
2007	23,187	107,558	22%
2008	19,678	112,154	18%
2009	18,997	114,692	17%
2010	16,208	79,106	20%
2011	18,880	73,131	26%
2012	922	54,822	.02%

WELLS FARGO HECM ENDORSEMENT SUMMARY REPORT BY LENDER ACTIVITY
Source: https://apps.hud.gov/pub/chums/f17fvc/hecm.cfm

Why did Wells Fargo stop offering reverse mortgages?

Upon the announcement that it would exit the reverse mortgage business, Wells Fargo’s executives told industry press outlet Reverse Mortgage Daily that home price unpredictability combined with HECM program restrictions made it difficult to determine whether borrowers could meet their loan obligations.

These obligations, which continue to apply to reverse mortgages today, include ongoing payment of property tax and homeowners insurance, as well as upkeep of the property to Federal Housing Administration (FHA) standards. As part of any FHA-insured reverse mortgage loan, the borrower must maintain these obligations in order to keep the loan current.

In turn, borrowers with FHA-insured reverse mortgages are guaranteed that they will continue to receive their loan payments as stated in the loan contract, and that they will never owe more to repay their reverse mortgage loan than the home is worth at the time of sale.

Market factors driving Wells Fargo’s exit from reverse mortgages:

• The housing crash in 2008 led to widespread home price uncertainty
• Wells Fargo could not predict home prices and the ability for borrowers to meet their loan obligations
• Banks at the time were focusing on core operating channels rather than ancillary businesses

Will Wells Fargo Bring Back Reverse Mortgages?

It’s anybody’s guess as to whether Wells Fargo will offer reverse mortgages in the future, but there’s nothing stopping the company from re-entering the HECM lending market.

While big banks are currently absent from the reverse mortgage landscape, there are many small banks that are lending actively, and many have identified reverse mortgages as a potential growth opportunity given the baby boom demographic and the influx of Americans who are ill prepared for retirement.

Summary:

Wells Fargo used to be one of the nation’s highest-producing reverse mortgage lenders.
The bank followed several other banks that decided to exist the reverse mortgage space.
Today, it remains to be seen whether big banks will re-enter the market.

Where to Get a Reverse Mortgage in 2023?

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 interest rates that are available. 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.

Visit ARLO, the All Reverse Loan Optimizer, to help you get started.

ARLO recommends these helpful resources:

Wells Fargo Reverse Mortgage Customer Care Number: (877) 937-9357

America's #1 Rated Reverse Lender Celebrating 19 Years of Excellence.

TALK TO OUR HUMAN EXPERTS TOLL FREE: 800-565-1722

LAUNCH ARLO CALCULATOR

22 Comments on this Article

Bob F.
January 2nd, 2022

I am 80 and my wife is 77, and we are both in reasonably good health. We owe approximately $157,000 on our home valued at approximately $300,000. We have no one to leave our assets to. Would a Reverse Mortgage make sense to us at our ages to insure that if one of us becomes incapacitated, the surviving member could remain in our home until our demise? We have good credit, and are not looking to take cash out of our home.
Reply to Bob
- ARLO™
  January 11th, 2022
  
  Hello Bob,
  I would advise you to speak to a financial advisor, but I would say that you may be a perfect candidate. The loan allows you to remain in your home for as long as you continue to pay the taxes and insurance in a timely manner. You would eliminate your current payment (if you have a low rate, that may not be much) but that would free up that cash for whatever you like to do or allow you to put it into savings.
  I am not a financial advisor so I always encourage people to talk to someone who can go over all their situation with them. You still have a pretty good equity position but if something happened to one of you, would the other be able to access it anyway if you didn't get the reverse mortgage? If you have equity but you can't access it (via a new refinance or a HELOC, etc.) you may be faced with the only option at that time as selling the home, so it always helps to sit down with someone trained to ask all the right questions and make sure that the loan meets your goals and needs.
  Just from your question, I would say that you would probably benefit tremendously from the loan but I don't know all your circumstances and would say it pays to talk to your accountant or other trusted financial advisor.
  Reply to ARLO
Debra R.
March 22nd, 2021

I need information concerning a reverse mortgage with well Fargo in 2011. I need the creditors we owed that we paid out the loan money. I tried to retrieve this information for Novad but they said they don't have that information.
Reply to Debra
- ARLO™
  March 23rd, 2021
  
  Hello Debra,
  
  If NOVAD is your servicer now, they would have the loan file and that information for the closing should still be part of the original loan file. However, if they do not have the information regarding the creditors paid off through the closing in their file, the only other suggestion (and unfortunately it is a shot in the dark) is to try the escrow/title company who originally closed the loan for you.
  Most states have just a 5 year record retention policy so those records may not even still be available as they would have been eligible for destruction 5 years ago but you may get lucky and have used a company that did not destroy old records. It's not likely that they still have the records from that time, but you never know until you contact them and ask!
  Reply to ARLO
  - Nicole J.
    January 29th, 2022
    
    Hi Arlo,
    My parents took out a reverse mortgage from Wells Fargo in 2009. My father was 79 years old. My father passed away in 2020. Their mortgage payment was only $900 a month. I feel my parents were taken advantaged not knowing much about reverse mortgages. Also Wells Fargo financial people had them use their IRAs which was over $100,000 for annuities. Their interest rate was 5.75 and added so much interest to their loan every month. They had $2,400 and more added to their loan every month. I checked to refinance it for a better interest rate but was told my mom would have had to pay 80% back to refinance it. I was told by the mortgage broker that most of the equity was gone after 9yrs. He said it was a horrible loan. Is it legal to have a reverse mortgage and have them talk my dad into an annuity? My mom sold her home this past August 2021 for $834,000 but only received $134,000. I believe Wells Fargo had taken advantage of my parents. Now my mom needs more money because she lives in a assisted living. Can I sue Wells Fargo for predatory loans? And does any Real Estate lawyers handle them?
    Reply to Nicole
    - ARLO™
      January 29th, 2022
      
      Hello Nicole,
      I can't give you legal advice. Most lenders will not originate a reverse mortgage loan and sell a financial product such as an annuity in conjunction with the loan and I find it surprising that Wells Fargo would. Did they sell dad an annuity as part of a reverse mortgage or is it possible that dad contacted his WF brokerage after he had cash sitting in his account looking for a "safe" investment?
      I can't really comment on the rest of the circumstances. I don't know if the reverse mortgage was used solely to fund the purchase of the financial product or if your mom and dad used the funds to pay off an existing loan so they could live payment free for many years, if it augmented their income or what. You may want to get as much information on the transaction as possible before incurring more cost for attorneys but that is entirely your call.
      Reply to ARLO
Deane S.
January 11th, 2021

I am a 87 yr old senior with a HUD Reverse mortgage. I still live in my home, but my money is almost to an end and property taxes will need to be paid. I have inquired about refinancing my loan of approx. 18 years many months ago. (no reply) I also have called (no answer) I am really stressed as I have heard, they can foreclosure if I do not have tax money. Can you direct me as how I can go about this? Wells Fargo was my lender-now does not do reverse mortgages anymore.
Reply to Deane
- ARLO™
  January 11th, 2021
  
  Hello Deane,
  
  I think you should consider several different options.
  Firstly, contact your local tax assessor and make sure there are no programs for which you qualify that may allow you an exemption from taxes at this point.
  You may not defer them, but some areas allow significant exemptions, and you need to check to see if you are eligible. Next, check your home value against the most recent statement you must see what your equity position is at this time.
  You can check with other reverse mortgage lenders as well if the one who is servicing your current loan will not return your calls. It could be that they are not an originator and have no vested interest in such a request (but they still should have let you know). Over the past 18 years one of two things may have happened.
  The value may have risen enough to refinance and that would be good for you at this time or it may not have and if you accrued interest this whole time and the value has not gone up; you need to know that a refinance is not an option and work on other solutions.
  
  Finally, there are often grant and aid programs available for low-income seniors and sometimes you really need to look for them, but it can be worth it.
  Check on the AARP website, use an internet search under the term or similar terms of "senior grants for property taxes near me" or even contact HUD counselors at 800-569-4287 or visit the HUD website.
  Churches and other community programs sometimes offer help as well if you belong to any groups that you can check with to see if they can offer help with the taxes if all else fails.
  Reply to ARLO
P. Sweeney
September 24th, 2020

My father passed away a few years ago. At the time of his death we were trying to get him into a rehab facility temporarily and he had a reverse mortgage with Wells Fargo. We requested most of the balance on the line of credit that he had on the RM to help get him into the assisted living, but Wells dragged their feet contacting him back which delayed the money being deposited into his account as he had requested. He died suddenly before the money could be deposited. We did not want his house, so we let it go back to Wells in a deed in lieu and the house was sold shortly afterward. Going through some paperwork I came across a statement issued after he died. The current outstanding Principal balance was $207,843.30 but then I see Growth on Principal that says $32,950.50. We were trying to get $30,000.00 to get him in the rehab but it was never distributed. Is THIS $32,950.50 now part of his estate or is it Well's money? I have tried to call the RM department, but I keep getting disconnected. Thank you.
Reply to P.
- ARLO™
  September 24th, 2020
  
  Good Afternoon,
  
  The answer to the question is none of the above!
  The line of credit grows in availability on the unused portion over time.
  The growth on the Principal Limit would have been the growth of funds that the line experienced giving the borrower greater borrowing potential.
  This is not interest that the borrower earns and had he borrowed them; he would have owed that much more.
  There are no funds on deposit anywhere earning money.
  It is almost like a credit line increase on a credit card.
  If he had an American Express with a line available of $25,000 but had not borrowed it, he would not owe it.
  But just because the card had a line of $25,000 available unused, there would not be $25,000 available there for the estate as a payout or for the credit card company to keep as a windfall.
  This is just money that was never borrowed and would not have been included in any payoff balance needed to pay off the loan.
  Because you did not repay the loan either by refinancing the loan or selling the property, those funds were not borrowed and would not have needed to be repaid but the value of the home was still insufficient to repay the amount that was borrowed and therefore there was no motivation for you to sell the home to retain equity.
  If the last draw had been taken before he passed, it just would have amounted to that much more of a loss to HUD on the loan as this would have been additional money lent and never repaid.
  Reply to ARLO
Karyl S.
December 30th, 2019

My husband and I had a reverse mortgage with Wells Fargo but at the time we did it he was over 62 and I was not. When he passed away in 2013, I had to use his life insurance to pay off my home. It was paid off for several years but in order to help my daughter and her family I got a home equity loan for $160,000 from a local credit union which I have been paying regularly.

My home is valued between $230,000-260,000. I recently had to sign up with a debit reduction company to lower my bills per month but because of what I left with after paying nothing the home equity loan and the debt resolution company. I hope left for everyday expenses and payment of life insurances and car insurance, etc. Can you get a reverse mortgage on a home equity mortgage loan?
Reply to Karyl
- ARLO™
  December 30th, 2019
  
  Hello Karyl,
  
  You can use a reverse mortgage to pay off a Home Equity Line of Credit (HELOC) if the HELOC was seasoned for more than 12 months with no large withdrawals in the past 12 months.
  However, you have stated several things here that leave me concerned with your ability to obtain a reverse mortgage on your home.
  Firstly, the reverse mortgage will only give you about 50% of the home's value at your age. If you owe $160,000 and the property is worth $230,000 - $260,000, I do not believe you would get enough from the reverse mortgage to pay off the HELOC (and it would have to be paid in full and closed as a condition of the loan).
  I would invite you to visit our online calculator to determine the most probable amounts you could expect to receive with a reverse mortgage for your circumstances.
  
  The other thing I would ask, or caution is whether any of your payments for taxes, insurance or HELOC have been paid late in the past 24 months?
  The reason I ask is because HUD requires lenders to conduct a financial assessment in accordance with their rules and if you have any late payments on any property charges in the past 24 months (which includes those items), they would require a Life Expectancy Set Aside (LESA) to pay taxes and insurance from the loan proceeds.
  Depending on your annual taxes and insurance, this amount can be substantial but, in any case, it would further reduce the amount of money available to you. I only bring this up since you commented on being involved in a debt repayment arrangement and want you to be aware of all circumstances as the calculator will not include the set aside.
  If you are aware of any credit issues, especially in the past 24 months, I would encourage you to contact our office and speak with a loan officer to determine if the loan is a viable option before you start paying costs.
  Reply to ARLO
Osmond Bullen
December 25th, 2019

I do not understand this " "When you get any loan, a standard forward loan or a reverse mortgage, even if the lender is not selling the servicing at that time, you never know what may change with that lender in the future. What cannot change are the terms in the loan once the loan has closed, no matter who the lender is. If a reverse mortgage servicing is sold, does that mean the loan ownership is sold and the originator say Wells Fargo sold servicing to Champion, Wells Fargo has no responsibility for the loan if Champion does not follow the loan guidelines? Help me understand please.
Reply to Osmond
- ARLO™
  December 26th, 2019
  
  Hello Osmond,
  Loans are assets that can be sold at any time. Also, if the lender were to become insolvent, that loan could be assigned to HUD or another lender. If Wells Fargo sells the loan to another entity as they have done with the servicing portfolio, the new holder of the Note (in this case Champion) is the legal owner of the Note.
  I can't advise you legally about liability if one or both of those entities violate your terms. Theoretically, if everything was absolutely up to date and pursuant to the terms of your contract at the time the new lien holder took over, anything that the new lien holder did that was in violation of the terms of your contract would be between you and the new lien holder (and keep in mind the loan is insured by HUD to ensure you always get all sums due to you under the terms of the loan as well).
  But the reason I cannot give you advice in this area is because I don't know what If anything Wells did or did not do that violated the terms of your loan, what you contend Champion is not following and who is actually liable. When you say not following guidelines, are you referring to some guidelines you've heard of or terms in the actual legal documents?
  The legal documents are the contract between you and the lender. "Guidelines" typically refer to what HUD is currently doing on things, but the loan documents lay out the contract between you and the lender. If the servicer is not acting in accordance with the terms in your loan documents, I would first write them with a return receipt outlining the areas where you believe they are violating your contract with the lender.
  If the situation is getting critical or there is any legal action threatened, I would advise you to immediately seek the advice of competent legal counsel and not sent letters on your own until you speak to counsel if it's more than just a disagreement on terms.
  If you believe the violations also involve the prior lien holder, perhaps you may want to seek legal counsel before you take any action to obtain advice in the case as well, both from a standpoint of reviewing your contention that they are violating the terms and also which entities should be included.
  Reply to ARLO
Louise R.
December 12th, 2019

I never got any money from my reverse mortgage, how do I get out of it?
Reply to Louise
- ARLO™
  December 14th, 2019
  
  Hello Louise,
  
  You should check your monthly statement to determine your current balance. The loan started with some balance of some kind -they cannot begin with a 0 balance.
  It could have been the amount to pay off an existing loan or possibly just the fees you agreed to when you originated the loan. But there had to be some balance for the loan to begin.
  The good news is that there is never a prepayment penalty on reverse mortgages. You may simply pay off the balance of the loan at any time without penalty. The best thing would be to write to the servicer and request a "Beneficiary's Demand for Payoff".
  By law they must send you a number to pay off the loan within a certain period and the best way to do it is to go to your bank and send a wire which is the same as cash.
  Otherwise, the payoff is held until the check clears. But either way will resolve your goals to pay off the loan.
  Reply to ARLO
G RAMSEY
April 29th, 2019

My partner and her late husband took out a reverse mtg several years ago with Well Fargo now they have sold the mortgage to someone else, is this legal?
Reply to G
- ARLO™
  April 29th, 2019
  
  Good Morning,
  
  Just as on the forward or conventional side, reverse mortgages are assets that lenders hold. As such, they can be sold at any time and often are. People who take a reverse mortgage, just like any other loan, need to shop for the best terms and program to suit their needs, not because the lender is one with whom they have always banked or have seen their commercials, etc.
  At one time, Wells Fargo was the largest lender in the reverse mortgage industry, they no longer originate and have sold their servicing. This is true also of Financial Freedom and MetLife Bank and it's a sure bet they won't be the last.
  
  When you get any loan, a standard forward loan or a reverse mortgage, even if the lender is not selling the servicing at that time, you never know what may change with that lender in the future. What cannot change are the terms in the loan once the loan has closed, no matter who the lender is.
  Therefore, get the best deal you possibly can before you close your loan because any new lender/servicer will also be bound by the terms in the original documents.
  Business models change, HUD changes, you just never know what could change at a lender's company (especially a large lender that answers to its shareholders or partners) but rest easy knowing that any new lender must also abide by the terms in the legal documents and that's why borrowers should always make sure that they shop for the best loan and program to fit their circumstances.
  Reply to ARLO
  - Miss Rage
    October 13th, 2021
    
    Champion Mortgage are thee biggest crooks in the mortgage industry. Their lawyers are fraudulent. They sneak in and change home owners insurance policies, lessening the coverage on very old people's homes. They come to doors, commit harassments, take photos of residences, print them in local newspapers as foreclosures, buddy up to local sheriff's department, developers and schedule sheriff's sales on these homes EVERY DAY. MY MOTHER IS 91, AND I CHASE TV THESE WOMEN OFF OUR PROPERTY. WE HAVE BEEN HERE SINCE 1964. THE WOMEN ARE ABIGAIL ODESS. AND DIANE DIEHL FROM WAUWATOSA, WISCONSIN, TWO VISCOUS CROOKS WHO SNEEK THROUGH THE VILLAGES OF VARIOUS CITIES, MINNETONKA IS ONE OF THEM. WE CITIZENS NEED TO STOP THESE FORECLOSURES-THEY ARE CORRUPT IN EVERY ASPECT. CALL PAPERS, TV, FBI, RADIO.
    Reply to Miss
    - ARLO™
      October 17th, 2021
      
      We have pointed out many issues with Champion and where we believe their level of service is lacking but I have no personal knowledge or even suspicion of evil deeds and instances of breaking the law such as you claim. If you have proof of your accusations, I would suggest that you contact your local district attorney and give them your information and lay out your proof. Contact the Consumer Financial Protection Bureau (CFPB) at https://www.consumerfinance.gov/about-us/contact-us/. If you have the evidence to show that Champion does what you claim, they can act and swiftly as well.
      
      Some of the things you allege don't even make sense. If a lender were to "sneak in and change an insurance policy", since they are listed as an additional insured party, it would be to their benefit to raise the coverage, not lower it. And insurance companies are not allowed to take direction from lenders in the first place. They must take direction from their insured borrower (believe me, we tell borrowers all the time when they ask us to call the insurance company on their behalf when changes are needed that it needs to come from them - that unfortunately, the borrower must be the one to make the changes because insurance companies will not take this direction from us). You're alleging that all insurance companies are in on it with Champion and take their word for changing their insured's policies? I'm sorry, I cannot believe this allegation without proof - even if I do not care for Champion myself. And then you allege that the law enforcement in the area are all on Champion's payroll as well? It would take more than that. If they did as you say, they could be challenged in court and their scheme would soon be laid bare before a judge.
      
      And finally, you claim that their lawyers are fraudulent as well as two individuals you name (whose names we have redacted) and if that is true, it would not be difficult for you to have their licenses and livelihoods revoked with complaints to the Wisconsin Bar Association as well as the Attorney General. You can also file grievances with the court system directly in Wisconsin by Telephone, Mail or Email and the instructions for doing so are on the Wisconsin Courts website at: https://www.wicourts.gov/services/public/lawyerreg/file.htm#:~:text=Grievances%20may%20be%20filed%20by,1%20to%20file%20your%20grievance.
      If the attorneys are acting illegally or in a manner not allowed, then they can take action. The loan is also a HUD insured loan so you can also contact HUD directly but our personal experience is that complaints to HUD are very slow to see resolution. You can contact your state or federal elected representative and I have seen Representatives and their office get involved directly if there is evidence of wrongdoing. But for any of the measures I have laid out, you would need to show them actual proof of your allegations.
      
      If we "sniff out" any real evidence of wrong doing, we will acknowledge that fact but so far, the only thing we know for sure is that their service is not always up to par. We welcome you to contact the necessary authorities and if you are able to substantiate any of your claims, please feel free to send us the results of the agency that levies the fines/penalties to Champion or any of the people involved with their operation to show that they have been found guilty of any of the things you accuse them of herein and we will run the story on our website as well.
      Reply to ARLO
Sheri R.
April 2nd, 2019

I want to bid in auction for condo. The association has put the lien on condo and judgement issued. Doing research, the deceased owner has a reverse mortgage with wells Fargo. If the judgment is Association and the bank doesn't bid, does the bid winner still owe bank.? Or is most likely the bank will bid?
Reply to Sheri
- ARLO™
  April 2nd, 2019
  
  Hello Sheri,
  
  The reverse mortgage is in first lien position. This means that Wells Fargo does not have to bid in order to protect their interest in the property when a subsequent lien holder forecloses. Anyone purchasing the home via auction should do their homework and check on other liens that would not be cleared as a result of the auction as you would not only still have the reverse mortgage on the property, but that loan is now due and payable and the lender will be looking for repayment under the terms of the Note and Deed or they too will begin a foreclosure proceeding to protect their interest in the property.
  The last thing you want to do is buy what you think is a home for a very low price, only to find out that there are other liens on the property that unless you pay them, the property will be foreclosed. We have had questions from people on just this subject in the past. Those thinking that they got a great deal on a condo only to find out that they didn't realize there was a mortgage on the home that would still be due at the conclusion of their purchase and they were suddenly facing foreclosure. I think each potential purchaser is responsible for their own title searches and it is extremely important to verify that the title on a home is clear so that you are not assuming more liability than you are prepared to assume or pay in the timeframe required.
  Reply to ARLO

Wells Fargo Reverse Mortgage Review (2023 Update)

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Wells Fargo Reverse Mortgage Review (2023 Update)

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