Capital One Financial Corp. (NYSE: COF) will be shutting down the home equity lending business run by its recently acquired Discover operations.
The website for Discover’s home loans business carries a statement that reads, “Discover Home Loans is no longer accepting applications for new home equity or mortgage refinance loans, although we will continue to process applications that are in progress.”
“We conducted an extensive strategic business review of Discover’s home equity and refinance loan business to better understand its position and potential as part of Capital One’s business portfolio,” said Capital One spokesperson in a statement first reported by Banking Dive. “In late June, we announced the difficult decision to exit this business. We are focused on supporting our customers and associates through this transition.”
I am sorry to hear this news. I have availed myself of a home equity loan on a couple of occasions in my past. It was an immediate source of financial assistance that was sorely needed at that time. Although, it did take additional time to repay the loan/loans, it served me well, and I appreciated the service.
The writing is on the wall, inflated equity is disappearing and will continue. Banks/lenders are looking to protect themselves from getting stuck with loans that will be uncollectable if borrowers stop paying for whatever reason as the market continues to correct itself–and it’s long overdue.