SunTrust Banks, Inc. (NYSE:STI) will discontinue its reverse mortgage product offerings today, September 1, the company has confirmed. The $172.2 billion national bank, which has closed 419 reverse mortgage loans to date in fiscal year 2011, has remained a quiet Top-25 lender in recent years.
The reverse mortgage retailer, which operates 1,661 retail branches located primarily in Florida, Georgia, Maryland, North Carolina, South Carolina, Tennessee, Virginia, and the District of Columbia, confirmed it will no longer accept reverse mortgage applications as of today.
“After careful consideration, we have determined that we will no longer offer reverse mortgages,” a company spokesman told RMD in an email. “Production volume for these types of loans is extremely small compared to our overall mortgage volume, and from a strategic perspective focusing our full resources on more traditional mortgage origination and servicing is the most effective and efficient use of our resources going forward.”
SunTrust said it will continue to process reverse loans in its pipeline, but will not be accepting any new applications.
The exit comes following other bank exits from the business, including Wells Fargo and Bank of America. RMD has been told that SunTrust previously hired originators from those companies after they left the industry.
“We are working with impacted employees to help them in identifying and pursuing other possible opportunities within the company and providing outplacement support,” the spokesman said.
The timing of the decision also coincides with the entry of another large financial services company: JG Wentworth Group, a division of PeachTree solutions, announced this week that it would officially launch a reverse mortgage division, with plans to grow.
Written by Elizabeth Ecker