Posted on May 16th, 2008 in Mr Mortgage's Personal Opinions/Research
SunTrust, one of the few remining wholesale mortgage lenders is eliminating Home Equity Lines of Credit (HELOCs) in most of their highest producing regions post haste. ALL LOANS MUST BE SUBMITTED BY TODAY AND FUND BY 6/19. We know this is certain in CA and are working on getting all other states impacted now.
Same-day notice to submit is drastic…they could have at least given the brokers 48-hours notice. Even worse, the West Coast AE’s got a notice mid-morning that ALL HELOCs had to be faxed to FL by 2pm PST. They got the email that they were losing it at 7:10am this morning. So, corporate give them a whopping 7hrs to get every loan in, boarded and faxed to FL for underwriting. That is a total mess. This move comes just one day after Chase did the same thing.
So, either SunTrust was selling all of their HELOCs to Chase or something very bad is happening in the second mortgage arena. ‘Thebfgb’ from the ML-IMPLODE Forum pointed out that maybe they just did not want to be the last big boy standing doing HELOCs and be used as a dumping ground.
There will be more to this story I am sure. Not, necessarily anything bad about SunTrust, because I believe they are one of the better banks. But, rather about the Home Equity Line disaster yet to be acknowledged.
On a positive note, wholesale mortgage loan volume has surged in the past week. I will have a report on that out later today. Most remaining wholesale lenders, including SunTrust, are very busy right now.
MORE NEWS…As I was typing I got an email saying WAMU will be shutting down HELOC’s as well. I have not confirmed this, but at this point I probably don’t need to.
MORE ON HELOC’S BELOW.