Mortgage Daily Logo

Fundings, Defaults Improve at SunTrust as Earnings Injured

Mortgage News

Delinquency and originations improved from the third quarter at SunTrust Banks Inc., but repurchases and HARP 2.0 put a dent in earnings.

SunTrust Mortgage Inc. and its affiliated siblings originated $6.826 billion in the fourth quarter, according to earnings data released Friday.

Business picked up from $5.8 billion originated in the third quarter but came up short compared to the $8.653 billion funded in the fourth-quarter 2010.

SunTrust’s own retail originators generated 55 percent of fourth-quarter business, while the wholesale channel funded 21 percent and correspondents were responsible for 24 percent.

Nearly three quarters of the latest volume was refinance activity.

During all of 2011, residential originations were $23.067 billion, falling from the prior year’s $29.257 billion.

The mortgage servicing portfolio was $157.800 billion as of the end of last month, falling from $161.0 billion three months earlier and $167.236 billion a year earlier.

The Dec. 31, 2011, total included $124.050 in mortgages serviced for others.

The Atlanta-based bank owned $46.7 billion in residential assets, more than $45.0 billion owned as of Sept. 30 and $46.5 billion owned at the end of 2010. Last month’s total included $6.7 billion in guaranteed loans, $23.2 billion in non-guaranteed loans, $15.8 billion in home-equity loans and $1.0 billion in residential construction loans.

Residential delinquency of between 30 and 89 days fell to 1.38 percent from the third quarter’s 1.45 percent and was much improved from 1.74 percent in the last three months of 2010.

Commercial real estate assets were reduced to $6.3 billion from $6.7 billion in the previous quarter and $8.7 billion in the same quarter during the previous year. “Commercial real estate” accounted for $5.1 billion, and commercial construction represented $1.2 billion.

Commercial real estate delinquency was unchanged from the third quarter at 0.17 percent but has fallen significantly from 0.43 percent in the fourth-quarter 2010. Commercial construction delinquency, however, surged to 0.60 percent from the prior quarter’s 0.11 percent and 0.42 percent in the same quarter during the prior year.

Mortgage operations had a $40 million loss. Earnings for the business swung from a $112 million third-quarter profit. In the final quarter of 2010, the mortgage unit contributed profits of $109 million.

Fourth-quarter 2011 mortgage earnings included a $62 million loss from mortgage production, swinging from a $54 million third-quarter profit.

“The $116 million sequential quarter decrease was predominantly driven by a $98 million increase in the mortgage repurchase provision, due to higher agency-related repurchase requests and an increase in the mortgage repurchase reserve,” the report stated. “As of Dec. 31, 2011, reserves for mortgage repurchases totaled $320 million, an increase of $38 million from the prior quarter.”

Servicing income fell to $22 million from $58 million. SunTrust attributed the decline in this category to an increase in prepayment assumptions now expected as a result of the Home Affordable Refinance Program updates.

Earnings at the parent company fell to $155 million from the third quarter’s $215 million and the fourth-quarter 2010’s $185 million.

As of the end of 2011, SunTrust had 29,182 full-time-equivalent employees, trimming its staff from 29,483 three months earlier. But headcount has grown since the end of 2010, when the staff size was 29,056.

SunTrust operated 1,659 banking offices as of Dec. 31, 2011, a few less than 1,668 at the end of the previous year.

Related Posts

Centex Home Equity Announces Name and Brand Change to National Mortgage, LLC

Third-Quarter 2012 Mortgage Litigation Index

Lawsuits involving excessive fees, servicing fees and loan fees beyond state maximums. Defendant Plaintiff Court Amount Overview Case Title Case Number Date Filed Date of Activity Link to Story Fannie Mae and Freddie Mac Orangeburg County, Richland County, South...

Centex Home Equity Announces Name and Brand Change to National Mortgage, LLC

Whistleblower Lawsuits

Litigation related to loan servicing, including escrow issues, transfer of servicing and servicing borrowers in bankruptcy and foreclosure.   Defendant Plaintiff Court Amount Overview Case Title Case Number Date Filed Date of Activity Link to Story Bank of...

Centex Home Equity Announces Name and Brand Change to National Mortgage, LLC

Net Branch Lawsuits

Litigation involving net branch operations. Defendant Plaintiff Court Amount Overview Case Title Case Number Date Filed Date of Activity Link to Story PHH Mortgage Corp. Mathews Supreme Court of Virginia na Court held that the term "branch office" includes not only...

Popular posts

How Long Does It Take to Refinance a Mortgage
How Long Does It Take to Refinance a Mortgage

So, you’re interested in refinancing your mortgage. Maybe you want some extra capital to do that home project you’ve always dreamed of, interest rates are nearing record lows, or you want to start consolidating debt. Regardless of the motivation behind the refinance,...

How Does Refinancing a Mortgage Work
How Does Refinancing a Mortgage Work

A home purchase is considered an investment, and a robust one at that. Savvy owners are constantly looking for new ways to reduce debt, save money, pay less in interest, and ultimately build equity. Refinancing is one way to leverage your investment and do just that....

What Does It Mean to Refinance Your Home
What Does It Mean to Refinance Your Home

You can think of refinancing your mortgage as a debt redo. Essentially, you’ll swap out the existing loan for a new one - ideally with better terms and conditions. Only this time it could help you save money on high mortgage payments, rather than just borrow it....

Setting up the Utilities in My New House
Setting up the Utilities in My New House

All the tedious, time-consuming paperwork has been signed, sealed, and delivered. Your belongings are packed into what seems like a million boxes and you have a solid plan to haul all your existing furniture to the new place. Just as your boxes and furniture need to...

When Is My First Mortgage Payment Due?
When Is My First Mortgage Payment Due?

Navigating your way through a brand-new mortgage loan can be a difficult task, especially for first-time homeowners.   After handing over a large sum of money for the down payment and closing costs, it’s important to pay attention to the timing of your first...

Newsletter

Don’t worry, we don’t spam