According to a memo written by Bob Lewis, president of Fifth Third Mortgage, the company is shutting down its wholesale division. The memo reads:
“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.
"While this was an extremely difficult decision to make, we intend to build on our leadership position in the correspondent market and remain committed to purchasing loans from smaller financial institutions and independent mortgage companies.
"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."
Fifth Third Bank is the latest in a line of banks that have shuttered its wholesale division over the past year, such as like Liberty Mortgage Corporation and AmTrust Bank. According to the Mortgage Bankers Association's (MBA) 2012 year-end forecast, overall mortgage volume is expected to drop from $1.7 trillion to $1.08 trillion in 2014. Fifth Third currently maintains a two out of five-star rating in terms of customer reviews, which surely hasn’t helped the company maintain its wholesale division.
“We are sorry to see Fifth Third exit wholesale lending," said Mat Ishbia, president and CEO of United Wholesale Mortgage (UWM). "As the market evolves, we will see lenders making some tough business decisions depending on their business models. United Wholesale Mortgage is, and always has been, a wholesale dedicated company committed to the success of wholesale brokers. Fifth Third’s absence provides new opportunities for companies like UWM, and we are well-staffed and well-prepared to increase business and effectively service new brokers.”