Fifth Third Bancorp has stopped financing residential property developments.
The Cincinnati-based bank has suspended financing for residential real estate developers, spokeswoman Debra DeCourcy told MortgageDaily.com in a phone interview.
“We continue to make commercial loans,” she said. “We suspended loans to residential real estate developers so that our real estate officers can focus on managing our existing portfolio and working out issues that exist therein.”
DeCourcy noted that the move impacts lending in 12 states. The company’s Web site indicates the states it serves are Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, Missouri, North Carolina, Ohio, Pennsylvania, Tennessee West Virginia.
No jobs will be impacted from the move, the spokeswoman said.
“What we do when we’re making any sort of commercial loan now, or residential loan for that matter, is we really look at it as a case-by-case basis now — much more than we would have … five years ago,” DeCourcy said.
Last week, Fifth Third announced a number of moves to shore up capital “in light of continued deterioration in credit trends during the second quarter of 2008 and its view that conditions are unlikely to improve in the near-term.” The bank said it planned to issue $1 billion in convertible preferred shares, reduce its second quarter dividend and sell non-core businesses over the next several quarters.
