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|SunTrust Abandoning Mortgage Broker Business
Notice indicates impending exit from wholesale lending
Oct. 31, 2013
By Mortgage Daily staff
|SunTrust Banks Inc. has made a decision to close its mortgage broker lending business. The move is likely to reduce residential originations by more than 10 percent.
Subsidiary SunTrust Mortgage Inc. notified its wholesale clients on Wednesday that it intends to stop accepting business from mortgage brokers.
A statement from the Atlanta-based company indicated that it will focus its mortgage business on areas that represent the greatest opportunity.
The notice given to brokers offered a little more insight.
"Several weeks ago, SunTrust Mortgage, like many competitors, announced that we will realign our business to a smaller overall mortgage market," the notice stated. "As mortgage lending has become more complex and increased interest rates have reduced refinance volume, we must sharpen our business focus on a few key areas."
The exit date is scheduled for Dec. 31.
SunTrust stopped accepting new applications from brokers yesterday.
The last day to lock registered loans is Nov. 12, while all broker loans must be closed and funded by Dec. 13.
"Clients with applications pending in this channel are not affected by this announcement; we will continue to work to close their loan," the company statement said.
Wholesale business accounted for $3.0 billion of the $25.9 billion originated by SunTrust during the nine months ended Sept. 30, according to earnings data.
For all of 2012, wholesale production made up $5.5 billion of the $32.1 billion in residential production.
In its prepared statement, the lender noted that SunTrust Mortgage will continue to serve clients through its retail, consumer direct and correspondent channels.
"This was a difficult decision, given how long we have been in broker mortgage lending and the loyal relationships we have developed," the broker notice stated.
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