Editor's note: After publishing this commentary, I've since been contacted by a spokesperson at Fifth Third Bancorp., who said it would be inaccurate to characterize the move at Home Equity of America as "exiting the business," as I did in my commentary below. The spokesperson noted that the company "will no longer be able to provide products and services to some of its brokers," and said that the memoradum refers only to the company's decision to eliminate it's outside sales function. The spokesperson further clarified that an inside sales team at Fifth Third Bank's Residential Wholesale Mortgage group will continue to originate loans through the HEA brand. Lastly, the company representive said I didn't cite an additional memo sent to brokers that discussed expanded offerings through Fifth Third.
None of this information was contained (or even implied) in the original memo I cited as the source of my speculation, so I think I can be reasonably forgiven for taking statements such as "Home Equity of America is no longer able to provide you with products and services" to be synonymous with an exit.
Prime lenders start feeling heat: We're now starting to see prime lenders exit due to market conditions. (Yes, you read that correctly: prime lenders).
Case in point: Home Equity of America, a mortage lender specializing in prime seconds and operating in 23 states, sent a letter to its brokers this week notifying them that it will exit the business some of them that it would no longer fund their loans. HEA is a subsidiary of Cincinnati-based Fifth Third Bank.