Citing changed economic times, Wells Fargo has announced that it will stop originating reverse mortgages, a product that some credit unions originate as well.
Reverse mortgages are loans for senior homeowners that use a portion of the home's equity as collateral.
Reverse mortgages generally do not have to be repaid until the last surviving homeowner permanently moves out of the property or dies. At that time, the estate has approximately six months to repay the balance of the reverse mortgage or sell the home to pay off the balance. All remaining equity is inherited by the estate. The estate is not personally liable if the home sells for less than the balance of the reverse mortgage.
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