SunTrust 4Q Mortgage Production Returns Profits

By Brad Finkelstein

Published January 18, 2013, 4:53 p.m. EST

1 Min Read

SunTrust Banks Inc., Atlanta, reported $241 million of mortgage production income for 4Q12, compared with losses of $64 million for 3Q12 and $62 million for 4Q11. The increase versus the third quarter was due to a $359 million reduction in the bank’s mortgage repurchase provision, but that was offset by declines in loan production and margins.

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It noted mortgage repurchase demand fell by 5% from 3Q12.

The servicing business added income of $45 million, down from 3Q12’s $64 million, but more than double the $22 million earned in 4Q11.

The quarter-to-quarter decline was because of less-favorable net hedge performance. The year-over-year increase was due to a $38 million HARP 2.0 writedown recognized in 4Q11. But lower servicing fees because SunTrust’s portfolio shrunk partially offset the gain.

SunTrust was a party to the mortgage servicing settlement and its portion recorded in the fourth quarter was $22 million, with $31 million accrued previously. Its total cash portion for the settlement is $63 million. It also needs to provide $100 million in relief to borrowers which had not been accrued for.

Brad Finkelstein

Originations Editor

Brad Finkelstein is the originations editor of National Mortgage News. While he covers the entire process, Brad's specialty is loan production and... Read full bio

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