SunTrust Mortgage is exiting broker lending
Blames complexity of the current mortgage market
The changing mortgage landscape continues to impact large banks and lenders, with SunTrust Mortgage (STI) announcing plans to exit broker lending, effective Dec. 31, 2013.
The firm released an announcement Thursday, reiterating the fact that several weeks ago, the bank said it would realign its business with plans to serve a "smaller overall mortgage market."
The firm attributes the need to transition away from the broker lending space to the fact that mortgage lending has become much more complex with rising interest rates and falling refinance volumes. The goal now is to focus on key areas where the firm can be strategically competitive.
"To this end, we will cease mortgage broker lending, effective Dec. 31 of this year. We will stop accepting new applications from brokers on and after Oct. 30, 2013. This was a difficult decision, given how long we have been in broker mortgage lending and the loyal relationships we have developed," the company said in an advisory.
This is not the first bank to make a major shift in how it serves the lending market.
EverBank Financial Corp. (EVER) said earlier this year that it’s exiting the wholesale broker home lending business.
EverBank instead chose to focus on retail lending, consumer-direct and correspondent lending.
The next few months will bring many changes to lenders, with the month of January ushering in the launch of the qualified mortgage rule and a series of other key servicing and lending rules tied to the Dodd-Frank Act.