Bank discovers hope in home equity

While many banks have struggled to grow amid the recession, at least one large regional lender has seen expansion in one area: home equity loans and lines of credit.

That bank is Atlanta-based SunTrust. The $172 billion asset institution reports 40% year-over-year growth in home equity borrowing. While home equity loans were popular during the 2000s housing boom, this time the trend could be more sustainable, says Don McClintic, SunTrust senior vice president of home equity and direct lending. “We anticipate this will carry over to next year,” McClintic tells Coffee Talk.

Not only are there more of the loans, but the consumer uses of the lines have shifted, says McClintic. What was once a loan known for wants, like boats or even vacations, has now become a lifeline for specific needs, McClintic says. That includes college tuition for a dependent, unexpected medical bills or home repairs.

The impact of the bank-wide trend has been felt on the Gulf Coast, says SunTrust Southwest Florida President and CEO Margaret Callihan. “It is staying strong,” says Callihan, who is based in Sarasota. “People who have been holding back are now starting to move on things they deferred on in the deepest and darkest days of the recession. Borrowing demand is starting to come back, and that gives me confidence.”