BankUnited stops originating retail mortgage loans
Is this the start of a mass exit?
BankUnited will no longer offer retail residential mortgage loans to consumers, according to an article in the Miami Herald.
The South Florida bank announced it also laid off some its workers.
The articles states:
South Florida’s largest locally based bank said new residential mortgages weren’t generating enough business but current mortgage holders won’t be left in the lurch.
“We remain committed to honoring all of our current loan commitments,” said Mary Harris, a spokeswoman for BankUnited.
The news closely follows Walter Investment Management’s announcement that Ditech Financial exited its distributed retail lending channel due to changes in the market.
"Throughout 2015 we moderated our investment in the distributed retail channel given current and expected market conditions, as well as recent regulatory considerations, and subsequently made the decision to exit the channel,” said Denmar Dixon, Walter Investment's vice chairman, CEO and president.
Instead, Ditech choose to go a different route and focus its efforts on growing its correspondent lending division services thanks to strong growth in the space over the last 18 months.
And these two are likely to only be the start of a new trend out of retail mortgage loans.
From the Miami Herald:
One industry source familiar with the bank said BankUnited had bet big on expanding its residential lending business last year but couldn’t generate enough volume because of compliance costs and slowing Latin American investment in Miami.