MetLife pushes reverse mortgages

By Bloomberg News
June 27, 2011

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SAN FRANCISCO — MetLife Inc., the biggest US life insurer, is poised to become the number one reverse-mortgage lender as Wells Fargo and Bank of America leave the market.

Wells Fargo, the largest US home lender, is retreating from reverse mortgages in part because of “unpredictable home values,’’ the company said June 16. The reverse mortgage was the most prominently featured product last week on the website of MetLife Bank, a unit that the company said may hedge the parent against declines in the main insurance business.

“They must know something that I don’t know,’’ said David Lykken, president of Mortgage Banking Solutions, an Austin, Texas-based consulting firm. “They’re too smart to be heading into an area that’s disastrous.’’

Demand for reverse mortgages contracted from record sales in 2009 after the housing slide eroded the home equity that seniors draw on to qualify for loans. MetLife climbed to second place in May from fifth two years earlier, according to the Department of Housing and Urban Development.

MetLife entered the business in 2008 with a purchase from EverBank Financial Corp.