National City home equity unit taking no more applications

The bank is accepting loan applications at branches but not through brokers.

CLEVELAND (AP) — National City Corp. said Monday that its wholesale home equity unit has stopped taking applications for loans and lines of credit as problems in the mortgage industry continue to spread.

“This is one of a number of steps National City has taken in recent weeks to help ensure that originations are in line with existing and anticipated market conditions,” the company said in a statement. “We are continuing to closely monitor the market and take the appropriate steps to best navigate market conditions.”

National City Home Equity offers loans and lines of credit through brokers that can be used in conjunction with the purchase of a home or the refinancing of one. National City is still accepting applications for such loans at its bank branches.

Distressed mortgage industry

The announcement came the same day that American Home Mortgage Investment Corp., the nation’s 10th-biggest home lender, filed for bankruptcy protection, the latest sign of a distressed mortgage industry.

Also Monday, Aegis Mortgage Corp., a mortgage lender whose owners include private-equity firm Cerberus Capital Management, said Monday it had suspended all loan originations.

Last month, National City said its earnings in the second quarter declined by nearly 27 percent from a year ago, due in part to bad mortgage and home equity loans.

The Cleveland-based company has assets of about $139 billion and about 1,300 branch offices in Ohio, Florida, Illinois, Indiana, Kentucky, Michigan, Missouri and Pennsylvania.