Cutbacks in the reverse mortgage market continue with the news that Macquarie Bank has suspended origination of its Silver Living product.Macquarie joins Bluestone, Australian Seniors Finance, Resi Mortgage Corp and Sentinel Group (in New Zealand), which have all either withdrawn reverse mortgages from the market or scaled back distribution over the past couple of months. A Macquarie spokesperson said yesterday that the bank would continue to service existing borrowers but all new loan origination had been suspended. Bluestone Group confirmed on Tuesday that it would stop distributing reverse mortgages through brokers and financial planners and would focus its activities on distribution through alliance partners. Bluestone has alliances with Westpac in Australia and New Zealand and also with about 20 credit unions operating under the umbrella of the credit union service provider Cuscal.These alliances account for 30 to 40 per cent of Bluestone's reverse mortgage business in Australia and about 50 per cent in New Zealand.In April the reverse mortgage specialist Australian Seniors Finance wrote to mortgage brokers to inform them that it planned to stop taking applications for new loans. That decision took effect on April 28.ASF said it would continue to meet obligations to existing customers and that it would continue to sell loans through its direct distribution channel and through its partnership arrangements with a number of credit unions.ASF's parent Sentinel has made a number of changes to the product it sells in New Zealand, including introducing a maximum loan amount and raising the minimum eligibility age. Resi Mortgage Corp withdrew its reverse mortgage from the market earlier this year. Resi sold a Macquarie Bank loan re-branded as Seniors Equity Advantage.Lenders are having trouble making money out of reverse mortgages given the high cost of wholesale funds. Reverse mortgages tend to be small, they cost a lot to originate because the borrower needs extra advice, and servicing costs are high because a substantial number of borrowers take their loan in a series of drawdowns.