step forward in its strategy of growing its share of the
potentially vast US reverse mortgage market with the acquisition of
EverBank Reverse Mortgage (ERM) from its parent company EverBank
Financial. No financial terms of the deal were
ERM will become a division or operating subsidiary of Metlife’s
wholly-owned unit MetLife Bank which entered the reverse mortgage
market in 2007.
“The acquisition of EverBank Reverse Mortgage will help us rapidly
grow this business and strengthens MetLife’s position as an
innovator in helping Americans make the most of what they have in
retirement,” said MetLife Bank president Donna DeMaio.
MetLife is targeting a market with the potential to grow rapidly as
American baby-boomers reach 62, the age at which they become
eligible to use a reverse mortgage to extract a portion of the
equity in their homes.
Based on the Reverse Mortgage Market Index (RMMI), a market
indicator developed jointly by industry body the National Reverse
Mortgage Lenders Association (NRMLA) and consultancy The Hollister
Group, Americans aged 62 or older held an estimated $4.3 trillion
of home equity in mid-2007.
At that stage just over 300,000 reverse mortgages representing a
market penetration of less than 1 percent had been originated in
the RMMI’s five-year history.
According to the NRMLA about 90 percent of the reverse mortgage
market is accounted for by the Federal Housing Administration’s
Home Equity Conversion Mortgage programme launched in 1989.
However, reverse mortgages have recently attracted a number of
major financial industry players including the US’ largest retail
mortgage lender Bank of America which in 2007 entered the market
via the acquisition of Seattle Mortgage Company (SMS). Launched in
1995, SMS was the first US private reverse mortgage lender.
Hollister estimates that the average home equity in a senior-owned
household is about $230,000.
Hollister also predicts that the value of home equity held by
seniors could more than double to $10 trillion over the next 10