Magazine article American Banker

Reverse Mortgage Deal by MetLife Aids Retiree Line

Magazine article American Banker

Reverse Mortgage Deal by MetLife Aids Retiree Line

Article excerpt

MetLife Inc. says its foray into reverse mortgages dovetails with its core retirement products, but it is taking care not to link the two businesses too closely.

The New York insurance and investment services company, which has been making residential loans since 2005 and started writing reverse mortgages last year, said Thursday that it had agreed to buy EverBank Financial Corp.'s reverse mortgage business to rapidly expand this activity.

Dan DeKeizer, a vice president and actuary for MetLife's retirement strategies group, said in an interview that reverse mortgages are "very consistent with our approach to the marketplace" because his company "is very focused on the retirement space ... and around retirement income. When we look at income and at demographics, it's pretty obvious that many individuals will choose or need to use equity to fund retirement."

However, he said, MetLife sees reverse mortgages "as being a complementary product, not a combined product."

Hence, its reverse mortgage borrowers will not be permitted to use funds tapped through a reverse mortgage to fund annuities or other retirement investments MetLife sells, he said.

"This was something we were looking at pretty carefully," he said, "and we came to the conclusion that in many cases, perhaps most cases, that would not be a suitable transaction."

AARP and other groups have in the past warned senior citizens against using reverse mortgage proceeds for investment purposes, arguing in part that funds left untouched in a reverse mortgage account grow faster than in comparable retirement investments.

At a December hearing of the Senate Special Committee on Aging, Prescott Cole, a San Francisco lawyer, testified on behalf of the Coalition to End Elder Financial Abuse that it has "major concerns about unscrupulous sales agents promoting reverse mortgages in order to generate funding to purchase annuity products. …

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