Wells Fargo Home Mortgage is getting out of the reverse mortgage wholesale production channel, a spokesman confirmed. However, it still will originate these loans through the retail channel.
The Wells Fargo & Co. unit will accept applications for the product from third-party originators through March 18.
The decision was made to exit wholesale for reverse mortgages after Wells Fargo did a detailed review of its production volume and goals for this product, the spokesman said.
While unable to provide data on the breakdown of retail versus wholesale, most of the reverse mortgages originated by Wells Fargo are through the retail channel, he said.
The spokesman added that the team members who supported the reverse mortgage wholesale channel would be transitioned to continue supporting the product on the retail side. He was unable to disclose how many positions were involved.
According to National Mortgage News' (NMN) Quarterly Data Report, in the third quarter of 2010 Wells Fargo was the top producer of reverse mortgages, with volume of $1.4 million.
The No. 2 originator, Bank of America Corp., announced several weeks ago that it was dropping out of the reverse mortgage business.
In other Wells news, once again ranked first among all residential funders in the most recent quarter with its market share jumping almost a full point to 24% — one of the highest readings on record, according to figures compiled by NMN.
Compared to the same period three years ago, the bank's production market share has doubled.
In 4Q10 it originated just shy of $130 billion of home mortgages, a 36% jump from the same period a year earlier. But more importantly, it has opened up a huge lead over the nation's number two ranked lender, BofA, out funding that company by a stunning $44 billion in the fourth quarter.
BofA, which has been saddled with billions of dollars in troubled mortgages from its 2008 purchase of Countrywide Financial Corp., originated $86 billion in 4Q10, giving it a market share of 16%, just about flat with the previous quarter.
The bank has been shifting resources away from originations into loan modifications, seeing its origination volume decline in the process.
Unlike BofA, Wells continues to use loan brokers to source loans to the firm, but also dominates in the retail and correspondent sector. (The figures were compiled by NMN and its sister publication the Quarterly Data Report.)
Smaller players in mortgages fear that all the regulatory changes promulgated under Dodd-Frank benefitted mostly the largest banks in the nation, creating a system where 'too big to fail' institutions will dominate in mortgages and other sectors for years to come.