Residential delinquency has declined for four consecutive quarters at SunTrust Banks Inc. Also lower were quarterly losses and home-loan originations — which sank for the second consecutive quarter and are likely to fall again.
In its fourth-quarter 2009 earnings data released today, the Atlanta-based institution reported $8.4 billion in residential production. Volume sank from $11.6 billion in the prior quarter — when business was also down — but increased from $7.2 billion the prior year.
Retail originations represented 53 percent of the latest activity, while one-quarter of business was wholesale and 22 percent was correspondent. The refinance share was 58 percent.
New loan applications, an indicator of upcoming originations, fell to $11.9 billion from the third quarter’s $13.4 billion.
SunTrust funded $50.1 billion during all of last year, better than $36.4 billion in 2008.
The mortgage servicing portfolio ended 2009 at $178.9 billion, higher than $177.6 billion three months earlier and $162.0 billion a year earlier. Last month’s figure included $146.7 billion in mortgages serviced for investors.
Residential loan assets were $30.8 billion on Dec. 31, 2009, less than $31.6 billion in the previous quarter and $32.1 billion in the previous year. Home-equity lines-of-credit finished the fourth quarter at $16.0 billion, edging lower from $16.1 billion at the end of September and $16.5 billion the prior year.
After declining in the third quarter, residential delinquency of between 30 and 89 days fell again — to 2.18 percent on Dec. 31 from 2.23 percent on Sept. 30. Home-loan late payments have fallen each quarter since the last quarter of 2008, when they stood at 2.93 percent.
HELOC delinquency fell to 1.36 percent from 1.45 percent.
Construction loan holdings fell to $6.6 billion from the third quarter’s $7.4 billion and sank from $9.9 billion 12 months earlier. The real estate construction delinquency rate tumbled to 1.09 percent from 2.63 percent.
Commercial mortgage assets eased to $15.1 billion from $15.3 billion but edged up from $15.0 billion a year ago.
Commercial mortgage delinquency declined to 0.77 percent from 0.84 percent on Sept. 30, 2009.
“We are encouraged by some positive operating results and improved credit trends,” SunTrust Chairman and Chief Executive Officer James M. Wells III stated in the report.
An increase in repurchase requests helped push losses on mortgage repurchase reserves to $143 million from just $25 million in the first quarter. SunTrust noted, however, that the repurchase requests are shifting, from 2006 and prior originations, to more recent originations since 2007.
Mortgage servicing income increased $383 million from the fourth-quarter 2008 as a result of a $370 million temporary mortgage servicing rights impairment in 2008.
The parent of SunTrust Mortgage Inc. had a $248 million fourth-quarter loss, better than the $317 million loss in the prior period and the $348 million loss a year prior.
“Our results clearly continue to be affected by recessionary pressures as evidenced by soft revenue and weak loan demand from consumer and commercial borrowers,” Wells added.
Company-wide headcount finished last year at 28,001, about the same as 28,015 three months earlier.
