Suddenly, top home equity lenders are playing musical chairs.
In the last month, several of the industry's most noteworthy executives have quit their posts or jumped ship. This in an industry where "executives usually retired" to leave a company, as one lender put it.
The list of companies that have had executive turmoil reads like a "best of" list in home equity lending: CIT Group/Consumer Finance, Livingston, N.J.; Associates Corporation of North America, Dallas; Contimortgage Corp., Horsham, Pa., and other top-tier companies.
Competition is rising in the industry because banks are jumping into the business in quest of the higher profit margins normally found there.
Some of the most talented home equity executives may jump to smaller institutions to take on the challenge of building a new business from the ground up. Others may be forced out as the established companies look for new blood because the competition is cutting into normally comfortable margins.
"Gosh, what a competitive marketplace!" said Bruce Crittenden, a recent departure from Household Finance Corp., Prospect Heights, Ill., where he was a managing partner. "That could have something to do with it."
Mr. Crittenden said he left the company because of philosophical differences with some Household executives. But he said that the heightened competition was creating anxiety at some home equity lenders. He said that may grease the exit door for some top-level leaders.
Allen Gutterman, president of Response Professional Placement, a New York City employment consultant, said that the competition was taking its toll on executives.
"Banks are willing to originate that paper as a loss leader," he said. "Even consumer finance companies are having a hard time competing with those prices."
He said that has been generating more pressure for home equity lending executives to perform.
"Everybody is looking for someone else to get the wheel squeaking. People are looking for people who can be more aggressive and bring in more business," he said.
"Senior management is not happy with the numbers people are bringing in," he said. "And what's the reaction? 'If you can't get it done, we will find someone who can.'"
