MetLife, the nation's largest life insurer, is exiting the reverse mortgage business, and Nationstar Mortgage will buy MetLife Bank’s reverse mortgage servicing portfolio.
In December, eFinancialCareers reported that MetLife was the second largest reverse mortgage lender in terms of volume. The move out of the reverse mortgage business comes as MetLife also steps away from retail banking products.
According to MetLife, its retail banking business represented just two percent of MetLife’s 2011 operating earnings. The deposit business is set to sell to GE Capital, and the warehouse finance business is being purchased by EverBank.
Job Cuts Ahead
According to reports from the Wall Street Journal, MetLife will eliminate about 500 jobs as it shakes free of its reverse mortgage business. MetLife just reported a first quarter net loss of $174 million, due to interest rate increases and MetLife’s lower credit spreads.
Smaller Players on the Lookout
The big question now is whether or not the existing players in reverse mortgages can absorb the talent at MetLife. The FHA is reporting shrinking demand for the product, and it could put a damper on large scale hiring at reverse mortgage firms. But as smaller reverse mortgage players work to build their efforts, senior level talent at MetLife should be especially attractive hires.
Reverse Mortgage Daily is reporting that Urban Financial Group has already hired former MetLife manager Ken Sawan as vice president of retail sales.
Genworth Financial Home Equity Access recently announced plans for a “fast-track” broker approval process, as well as hiring of sales and operations staff, according to reports from Reverse Mortgage Daily. The statement came a day after MetLife’s own announcement.
MetLife isn’t the only large financial services firm to drop reverse mortgage products. Back in June, Wells Fargo, the largest reverse mortgage provider, exited the business, and Bank of America left the business in early 2011, fearing rising loan defaults and foreclosures.