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Should you get a Wells Fargo Reverse Mortgage

Admin     12/30/09 12:30am
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Should I get my Reverse Mortgage from Wells Fargo?

We hear this question quite often. After all, Wells Fargo Bank is one of the nation's largest banks and does more reverse mortgages every year than any other lender in the United States. And since they are already handling many borrower's banking needs, it seems only natural for most of these borrowers to check with their bank first when they do make the decision that a reverse mortgage is right for them. But is that the best decision?

Firstly, almost all reverse mortgages being done today are the government-insured Home Equity Conversion Mortgage (HECM or "Heck-um"). Prior to 1988 when Ronald Reagan signed the legislation which made the reverse mortgage an FHA-insured product (FHA being the Federal Housing Administration, a division of the Department of Housing and Urban Development or HUD), reverse mortgages had unsavory features such as shared appreciation which could allow lenders to set appreciation rates.

By setting appreciation rates that were not consistent with the market results, lenders could easily wind up owning borrowers' properties. With the modern FHA regulated and insured product, borrower safeguards were added. Many of the myths of reverse mortgages still persist today but borrowers retain ownership of their homes and the product is constantly being refined by HUD to further protect borrowers. So that gets us back to the question of whether or not a borrower should seek a large lender like Wells Fargo Bank to obtain their reverse Mortgage or a small lender like All Reverse Mortgage Company.

With Wells Fargo you must get better guarantees, right? NO. A HUD HECM is the same no matter which lender you use to get the loan and HUD makes the same guarantees. Well then, since Wells Fargo is bigger, they must be able to do the tougher deals...right? Again, no. HUD, through FHA administers the program and sets the ground rules. In fact, at All Reverse Mortgage we have been able to do several loans on properties located in condominium projects denied by Wells Fargo Bank, for borrowers with trusts that Wells Fargo Bank could not accept and for properties denied by Wells.

In fact, at All Reverse Mortgage, the specialists who process your loans have underwritten loans (which means they hold a HUD Designated Underwriter CHUMS number and have been approved by FHA to underwrite the loans, they are not just paper pushers), have insured the loans, have sold the loans to Wall Street and were part of a team who wrote a jumbo proprietary reverse mortgage product and sold it to Wall Street. They really are experts when it comes to reverse mortgages. Well then, you must be thinking that because they are bigger, Wells Fargo Bank must be able to give their borrowers a better rate or lower fees.

Here again, the facts bear out that All Reverse Mortgage is consistently lower in their origination fees, their servicing fees, available margins and their fixed rates.


we beat wells fargo reverse mortgage rates

Because we are approved with just about every source offering reverse mortgages, we have access to the best programs and lowest rates and fees.

A quick glance at a map provided by Google Maps will show the reader just how many branches Wells Fargo has in California alone. This is a pretty good explanation as to why they have such a strong hold and originate so many reverse mortgages.

wells fargo reverse mortgage locations in california

Does this mean that we are trying to say anything bad about Wells Fargo Bank? Absolutely not! but if you are like us and you believe that you should not have to pay what could amount to thousands of dollars of your home's equity for the "privilege" of getting your reverse mortgage with one company, when you can get the same FHA-insured loan with another company for much less and in most cases much more quickly, then we believe that you should contact us at All Reverse Mortgage Company.

The HUD Lending Limits are the same for all companies and the HUD insurance affords the same protection to all borrowers regardless of which company you choose for your reverse mortgage. We believe that since that's the case, you should save thousands of dollars and also get the best possible service. Give us a call and let us prove that to you with a simple quote. After all, it's your equity and there is no reason to throw thousands of dollars of it away just for the privilege of using one company over another for the same product.

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3 Comment(s)
Jerry
3/10/10 3:08am
Great article, you're right it sure does pay to shop around. I found this to be helpful in my search, thanks for all the great content on your website!
Mary Ann
7/10/10 2:15pm
My husband and I took out a reverse mortgage from Wells Fargo in 2002. My husband was at least 62-I was not. My husband passed away in Feb.2010-two weeks later, they THREATENED me with forclosure-and continue to do so!! I have a lawyer involved-I signed the papers, to the loan-my name is on the deed of our home, AND- our house was mortgage free until this. We only took out monies on a "need" basis-now they want to foreclose on our home-even tho I live there, and will until I die!! We only took out $20,000-$30,000 at the most-but they want the entire amount that our house is worth-which is in the $170,000 to $180,000 range. I wish we had this info before. HELP!!!
Michael Branson
7/13/10 11:34pm
The Loan Officer should have been honest and very open with you about what happens on a reverse mortgage when you take one spouse off in order to qualify. We never advise it unless the borrowers have absolutely no other choice or they have other options in place that they can use in the event of the death of the spouse who is on the loan (such as a life insurance policy or other payment available which would retired the reverse mortgage debt).

Having said that, Wells Fargo Reverse Mortgage needs to call the loan due and payable under the terms of the Note and Deed of Trust at this time, they do not need to foreclose if you can make other arrangements. They are not entitled to your home and can only foreclose as a last resort to collect the outstanding funds due on the reverse mortgage. You do have options, and hopefully one will work for you. You can refinance the loan at this time in only your name and if you are now 62 or over, since you have not used very much of the mortgage proceeds, you probably would qualify for a reverse mortgage on your own. If you are not yet 62, then with that small a balance, you can always look into traditional financing via a First Trust Deed or a Home Equity Line of Credit (HELOC). If you are not yet 62 and do not qualify for a traditional mortgage, maybe you can look to family to help you with financing until you do turn 62 at which time you could qualify for the reverse mortgage loan and pay the interim financing off with a new reverse mortgage at that time.

I don't know all your particulars, but if you would like to call me at our office, I would be happy to discuss these options with you and see if they would work for you. If you have turned 62 since 2002 and your balance is less than $50,000 on a property valued at $170,000 or more, I am confident that you would have no problem now obtaining financing in your own name.




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