|National City Corp.'s warehouse lending unit will be shut down. It's the second time the company's new parent has exited warehouse lending and another blow to mortgage bankers who are struggling to find financing for their originations.
The PNC Financial Services Group has decided to close the operation, spokesman Fred Solomon confirmed to MortgageDaily.com in a statement.
"PNC conducted a thorough review of the business case for mortgage warehouse lending and determined that this operation does not fit our strategy," the statement said.
Solomon noted that an orderly wind down of the business is expected to take up to 18 months.
He declined, however, to comment on how many customers or employees are impacted by the move.
National City was acquired by PNC on Dec. 31 for $6.1 billion in stock and cash.
PNC itself previously exited its own warehouse lending business around 2000 in a restructuring following the 1998 credit crisis.
The latest move follows JPMorgan Chase & Co.'s exit from warehouse lending last month.
As available warehouse lenders have diminished, several mortgage banking firms have gone belly up, with Florida-based Popular Mortgage Corp. ending operations last month after its warehouse line was cut; Chicago-based Residential Loan Centers of America Inc. shutting down on Feb. 15 after it lost its line-of-credit with Countrywide; and CU National Mortgage recently notifying its credit union customers that it stopped processing loan originations because, among other things, its warehouse line-of-credit was cut.
In February, NetMore America Inc. advised its brokers that it would scale back on refinance fundings to maintain enough warehouse capacity for its purchase business.