Fifth Third Bank has sent a communique to affected originators, with president of Fifth Third Mortgage Company Bob Lewis confirming the lender would shut down its wholesale division and focus on correspondent lending.
"As you are aware, there have been significant changes within the mortgage industry over the past several years. Fifth Third conducts regular reviews of the industries we serve based on the changing competitive and regulatory environment. Based on the current environment, and after careful consideration, we have decided to exit the wholesale business and focus third-party origination on correspondent lending," the memo said.
Lewis said the bank was looking to "build on our leadership position in the corresponding market" and would remain committed to purchasing loans from independent mortgage companies and smaller financial institutions, but that Fifth Third would be terminating its broker agreements as of March 14.
"Please consider this official termination, effective March 14, 2014, of your Residential Wholesale Loan Broker Agreement with us. We are committed to working closely with you to ensure that loans currently in the pipeline are fulfilled and processed for your customers. New registrations will be accepted through March 14, 2014, and we will continue accepting applications until March 31, 2014."
A major lender has shut down its wholesale division.