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Many Washington, DC homeowners purchased their homes with the idea of building wealth through equity. Some have even planned their retirement around using the equity in their Washington, DC homes. If you are among the homeowners who plan to use equity in your Washington, DC home to help fund your senior years, you will want to know about the latest news in the reverse mortgage industry.

Mortgage lender Wells Fargo recently announced that it will no longer offer reverse mortgages due to the current unpredictability of home values. Another reason that Wells Fargo is exiting the reverse mortgage industry is the restrictions that make it difficult to determine seniors' ability to pay for property taxes, homeowners' insurance, and other responsibilities of home ownership.

Wells Fargo is not the only major lender to leave the reverse mortgage business. Earlier this year, Bank of America also made the decision to get out of the reverse mortgage arena. Wells Fargo will still service existing reverse mortgages but, as of June 30, will no longer accept new applications.

In 2010, reverse mortgages accounted for only 2.2 percent of the bank's retail mortgage business.
The reverse mortgage program was created by the government in 1987 to assist seniors who were house rich but cash poor. Seniors can borrow against the equity in their homes for a lump sum or a monthly income. The loan is repaid upon the death of the borrower or the sale of the home. Wells Fargo, which is the nation's largest originator of home mortgages, began offering reverse mortgages in 1990.

Wells Fargo says it is still committed to providing options for seniors who want or need access to the equity in their homes. However, the exit of Wells Fargo signals the reversal of business models created over a long period of rising asset values. Many baby boomers are counting on the equity in their homes for the cash they need to see them through their golden years.

If you need help with a reverse mortgage or need more information about the future of reverse mortgages, contact Rachel Valentino at Valentino and Associates. Rachel is an SRES (Senior Real Estate Specialist). She can help you decide how best to use the home equity that you have worked so hard to build. Call her today at (202) 243-7700.