Home Equity of America - Prime Second Specialist (sub. of Fifth Third Bank)

Update, April 23: We have received unofficial word that HEA's freeze is temporary, due cutting outside AE staff. Business is reportedly still going on with "core" brokers to the handful of remaining inside AEs; if you think this is relevant to you, you should check with the company before assuming anything about their status. Stay tuned for updates.

Update, April 25: Fifth Third was kind enough to send in an official clarification of their situation, the essentials of which we are posting here with permission:

The streamlining refers to HEA’s decision to re-align its business and eliminate its Outside Sales function. HEA is retaining its Inside Sales function, which will report into Fifth Third Bank’s Residential Mortgage line of business. The Inside Sales team will have responsibility for brokers retained by HEA as well as new brokers.

In addition, the Cincinnati HEA Regional Credit Center will continue to support the Inside Sales team.

... there is no “freeze” regarding business between HEA and some of its brokers. Existing applications in the pipeline will be handled by HEA through April 30, but brokers may partner with a representative if they need to close a loan during the first week of May. Inside Sales representatives will contact brokers retained by HEA, and future submissions may be made through Account Executives or Client Relationship Representatives.

At this time, Fifth Third Bank’s Residential Wholesale Mortgage group will continue to originate business through the HEA brand. However, as new products and services (including first mortgages) are made available, a decision may be made regarding the continuation of the HEA brand. In any event, Fifth Third Bank will continue to offer products and services to those active brokers.

...

Thank you,

Amy Williams
Public Relations Specialist
Fifth Third Bancorp

(Original entry follows).

We have obtained a letter announcing that HEA is shutting down (or more accurately, had ceased accepting new business on Tuesday). Despite HEA's focus on prime, Fifth Third apparently determined it was not worth keeping the unit open, as second liens have become much harder to fund. Housingwire comments on this topic:

We're told that while the prime market in general isn't likely to see much upheaval, that same logic doesn't apply to second liens, which have fallen out of favor with Wall Street at nearly every credit level. [HEA's closure] would seem to be the first item of evidence backing that sort of logic up.

I would also add that it becomes much more difficult to extract one's home equity when one is already near 100% LTV and the "V" portion isn't going up anymore.

HEO operated in 23 states. No word yet on their loan volume or size of the workforce effected.