Many banks have already scaled back home lending or even left the business. With profit margins shrinking, inventories of homes at crisis levels and competition from nonbanks intensifying, that’s unlikely to change.
HomeStreet Bank will attempt to sell its stand-alone mortgage business and portfolio of servicing rights, a move that comes amid growing pressure from an activist investor to exit home lending and concerns about declining demand and regulatory challenges.
The rise in home values is good news for homeowners looking to tap the equity in their homes to pay down debt or make big purchases, but some consumer groups fear it could lead to a new wave of loan defaults.
