I read your post and was relieved to find someone in the same boat. Did you get any response? Or, did you consult with any third party professionals on the subject? I have an unsecured HELOC, fought with two different servicers–received written documentation that the loan was paid and closed. They several months later, I am in a new home and go to get a HELOC. The lender pulls my credit and alerts me to the fact that another vendor is listing my HELOC as open/active with zero balance but has 400k credit available. I explained the situation, and they didn’t care. So, I used it, naturally. I have been paying on time for a couple years–no I have suffered a major hardship in my business and it’s looking really bleak. I need to research my options in the event I cannot pay. Any advice much apprecitated (justin at wootgigz.com)

Yes, I was talking about SunTrust 1st mortgage divisions selling the heck out of risky 2nd mortgage product for years.

I dont think just because dedicated 2nd mortgage reps sold more of them, it makes them safe. I would be interested in seeing the total number of 2nds sold by state/original LTV/year/quarter.

I am willing to bet the majority of the 2nds on the books are underwater just like with the other large 2nd holders.

Also to know, the were AE’s in footprint (and about 4 out of footprint) that focused only on Equity loan production. They were under the bank, not mortgage umbrella, until recently. The production you saw in the “bubble states” was that of what was produced by SunTrust 1st mortgage Wholesale AE’s , not the bank AE’s it also underwritten by 1st mortgage, and then sold to the bank. Those were the worst of the worst loans and what made SunTrust pull the Out of Footprint states in May. The rest of the dedicated Equity AE’s as well as first mortgage AE’s who sold HELOCS was still viable until the complete shut down 10 days ago. Trust me on the equity stuff, I was there from the beginning and know it well. Starting it in Orlando in 1996. Having been there from the start, I was very sad to see the Equity Group Closed Down. I have a bunch of friends who are losing there jobs.

They were a major piggy lender even until recently because they were the only ones offering portfolio HELOCs to 95% until late last year. Then they cut it back to 90 then 85% then gone.

Each and every time a major lender would exit the business SunTrusts volume would increase. I have two good friends who are AE’s there. I tracked the volume of such.

You maybe right about the footprint and retail branch customers etc but I think you are not fully aware of how much wholesale business they did in the bubble states.

According to Fitch HELOCs make up 123% of SunTrusts total equity and 17% of thier total loans.

Fitch thinks that 23% are 3rd party and 77% are branch but the raters have always reported this wrong. They consider 3rd party builk purchases or correspondent lending. Wholesale channel is ‘branch’.

Anyway, even with footprint originated HELOCs, negative equity is negative equity. BofA recently said on their earnings conf call that they see ‘no material quality differnces between wholesale and retail originated HELOC’s.’

I don’t think SunTrust is going down but do believe they have more pain to come in their construction, heloc, pay option and overall alt-a resi portfolios.

The majority of the majority coming from the in footprint states. The bank elected now to exit the wholesale equity business completely, prompting the mortgage company to divest themselves of the remaining AE’s, sad thing. SunTrust is still very much alive and kicking in the retail channel of the bank.

Most of your stuff is right on and I appreciate your insight. Since this website is now viewed so much nationally, I would love to see more information than just California. Something positive in this business would also be nice.

We pprovide research on all of the banks and their real time defaults and loans taken back at foreclosure auctio. It gives a real good idea of future losses. Shoot me an email at mrmortgagetruth@gmail.com

Where do we find out more about that?

A Flyer I got from Chase in April was titled “You’re not boxed in with the Chase Condo program. “