Reverse Mortgage Loan Blog

First Midwest Bancorp Inc., one of the Chicago area’s biggest locally headquartered banks, has restructured its mortgage practice to reflect a bigger emphasis on reverse mortgages instead of mortgage originations.

“We have a little older clientele, and from time to time, as part of the strategic planning of the bank, we look at the performance and market opportunities of all different areas,” Cynthia Lance, executive vice president and corporate secretary, said last week.

“We realized we had a stronger need and impact in the reverse mortgage business, and we restructured that department for its emphasis to be primarily reverse mortgages and not in the origination area.”

Reverse-mortgage products, which give older homeowners an opportunity to tap the equity in their homes, are a more efficient use of the bank’s resources than originations, Lance said. The Itasca-based bank won’t be originating mortgages internally, she said.

So what happens if a customer walks into one of First Midwest’s 103 offices looking for a mortgage, and the $8 billion full-service bank is no longer originating them?

“We’ll work with you to find a good mortgage lender at a good rate for you,” Lance said.

Though reverse mortgages represent less than 1 percent of the $10 trillion U.S. home-loan market, the number of federally backed reverse mortgages rose 41 percent in the 12 months ended Sept. 30, according to the Department of Housing and Urban Development.

First Midwest’s restructuring has created uncertainty for a small number of its 2,100 workers.

“It resulted in shifting some personnel around and resulted in the elimination of a couple of positions,” she said. “We’re also looking to redeploy folks.”

They will remain on the payroll until at least Jan. 15.

The number of workers on the bubble are fewer than 20 and could be as little as 10, Lance said.

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