ING Direct Cutting Ties With Mortgage Brokers

Date : 04/04/2012 @ 3:51PM
Source : Dow Jones News
Stock : Ing Grp., N.V. (ING)
Quote : 17.0  -0.13 (-0.76%) @ 4:02PM

ING Direct Cutting Ties With Mortgage Brokers

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ING Direct USA, the online bank recently acquired by Capital One Financial Corp. (COF), is exiting from the wholesale mortgage business.

In notices sent to partners this week, ING said it will cease doing business with mortgage brokers and correspondent lenders as of this month.

The company, known for the orange ball in its logo, said in one notice it would stop originating mortgages through brokers as of April 3. Brokers can still submit loan applications taken on or before April 3 to ING until May 3.

In a separate notice, ING said it will stop acquiring home loans from correspondent lenders effective April 10, though partners have until May 10 to submit loans initiated on or before April 10.

Capital One, which completed its acquisition of ING Direct in February, confirmed the decision Wednesday.

"The existing indirect home loans work will be discontinued across the organization," a spokeswoman for the McLean, Va.-based bank said in an emailed statement. "Exiting the indirect home loans business allows Capital One to focus on its preferred direct-to-consumer mortgage origination model."

The change doesn't affect existing mortgage customers or customers who have applied for loans, the spokeswoman said, adding the bank will "continue offering Orange Mortgage loans directly to customers."

Executives at Capital One, which gained regulatory approval in February to buy ING's online bank from ING Groep NV (ING), have said they planned to put the ING mortgage portfolio into run-off.

Other banks, including Bank of America Corp. (BAC), Citigroup Inc. (C) and Ally Financial Inc. (GMA.XX), have exited from or scaled back in the brokered mortgage or correspondent lending markets.

Citi said in February it was stopping originating mortgages through brokers entirely, but it would continue to buy loans from correspondents. Bank of America last year said it was exiting from the correspondent business, in which smaller banks originate mortgages and sell them to other banks, like Bank of America.

ING, which focuses primarily on "jumbo loans" and adjustable-rate mortgages, is a relatively small mortgage lender, ranking 20th in the nation for overall originations, according to Inside Mortgage Finance.

For wholesale originations, it ranked 17th.

-By Andrew R. Johnson, Dow Jones Newswires; 212-416-3214; andrew.r.johnson@dowjones.com

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