DES MOINES, Iowa – Wells Fargo Home Mortgage said Thursday that it will no longer make so-called reverse mortgage loans, citing unpredictable home values and restrictions that make it difficult to determine if borrowers can afford homeowners' insurance and other financial obligations.
The lender said it will stop taking new applications for reverse mortgages after June 30, but will continue to service the loans of its existing reverse mortgage customers. The 1,000 workers in the bank's reverse mortgage division will be given opportunities to apply for other jobs at Wells Fargo.
In February, Bank of America also announced that it would exit the reverse mortgage origination business.
If I'm reading this correctly, the banks are not optimistic on real estate's future. If I'm reading that correctly, and if the banks are correct... how will that fit into Bernanke's view of inflation/deflation? And how will he choose to "help?"
Talk on Bloomberg yesterday was 2015 as the earliest for a positive turn in real estate, due to all the foreclosures... happening, and in the stacks of papers of those that should be happening... If I can find an article on that, I'll post it.
UPDATE: (I can't find it, but here is a contrasting, somewhat OPTIMISTIC, perspective on US real estate):