When considering a reverse mortgage, selecting a lender that aligns with your goals is essential. While large national banks are well-known for traditional home loans, their approach to reverse mortgages differs significantly. Many prominent institutions, such as Wells Fargo, Chase, and Bank of America, no longer offer reverse mortgages. Instead, smaller regional banks and specialized non-bank lenders often fill the gap but they are few and far between.

If you approach a large bank about a reverse mortgage, chances are they will refer you to an external specialist. For this reason, it’s important to shop around and choose a reverse mortgage broker that prioritizes reverse mortgages and has expertise in this area.

Why It’s Hard to Find a Reverse Mortgage Bank

In the past, reverse mortgages were offered by major banks, including Wells Fargo, Bank of America, and MetLife Bank. However, these institutions began stepping away from the market following the financial crisis of 2008.

In 2011, Bank of America announced it would no longer include reverse mortgages as part of its core services. Soon after, Wells Fargo exited the space, citing concerns about fluctuating home values and borrowers’ ability to meet ongoing loan requirements. Around the same time, MetLife transitioned out of the banking industry altogether. It is unlikely that there is a local reverse mortgage bank in your area.

More recently, American Advisors Group (AAG), a large non-bank lender, sold its reverse mortgage servicing portfolio—a move reflecting how financial institutions continue to reassess their role in this unique market. Factors like regulatory changes, market conditions, and strategic priorities have prompted these shifts.

Understanding Reverse Mortgage Bank vs. Non-Bank Lenders and Brokers

Reverse mortgage lenders generally fall into two categories: banks or non-bank lenders and brokers. A reverse mortgage bank uses customer deposits to fund loans and is backed by Federal Deposit Insurance Corporation (FDIC) protection for those deposits. Non-bank lenders, on the other hand, are funded differently and do not offer FDIC insurance but are still regulated.

Some lenders operate as both banks and non-banks, depending on their structure. For you, the borrower, this distinction has less impact on the loan process itself, but can influence your overall experience and the level of customer service you receive.

Should You Consider a Non-Bank Lender or Broker?

Both banks and non-bank lenders offer reverse mortgages that adhere to HUD guidelines under the Home Equity Conversion Mortgage (HECM) program. And reverse mortgage brokers often offer the HECM FHA loan in addition to a multitude of proprietary loan options that are now available to those as young as 55 in most states. The primary difference often lies in product offerings, service, and pricing.

While you might feel more comfortable working with a reverse mortgage bank, non-bank brokers, like Northwest Reverse Mortgage, specialize in these loans. They often provide faster processing, more personalized customer service, and competitive rates—all without sacrificing the quality or integrity of the loan terms. Many of our local banks and credit unions refer their clients to us.

Comparing Your Options: Banks, Direct Lenders, and Brokers

When deciding on a reverse mortgage bank, lender or broker, it’s worth comparing the pros and cons of working with a bank, direct lender, or mortgage broker:

At Northwest Reverse Mortgage, we aren’t a reverse mortgage bank but we are a reverse mortgage broker who specializes in guiding you through the reverse mortgage process with expertise and care. Whether you’re considering a reverse mortgage bank or exploring other lending options, we’re here to ensure you make an informed and confident decision.