We’ve been sounding the horns on the coming woes tied to home equity loans and lines of credit for awhile now here at HW; and you might have missed that S&P joined that chorus as well, earlier this week. The WSJ picks up on the thread Friday morning, and cautions investors to “take off their rose-colored glasses.” From the story:

For investors, it would be best to avoid lenders with heavy exposure to home-equity loans written by outside mortgage brokers and other third parties that often employ lax underwriting standards. Instead, stick with banks that made their own loans during the real-estate surge. Using this stance, investors should use caution when it comes to First Horizon National. According to a Goldman analysis, 15% of First Horizon’s home-equity loans, or 5% of all its loans, were made by outside parties. Outsider-written loans represented 22% of Fifth Third Bancorp’s portfolio, or 3% of its total loans. And 14% of Wells Fargo’s home loans, or 3% of total loans, were written by third parties. … On the flip side, Comerica, Regions Financial and BB&T Corp. hold almost no loans made by outsiders, which is a good sign.