SunTrust Bank Equity Wholesale - Home Equity
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Notice has been sent to brokers (view pdf) that SunTrust Bank Equity Wholesale is being shut down, and no more equity products will be offered through the wholesale line of business. Applications will not be accepted after today, and all loans must be closed and funded by 2008-08-29.
Emails sent to brokers by AE's point to the volume of SunTrust's equity lending:
"With an average loan size of $75,000, which was one of the smallest within our footprint, you booked over $98 million in 2nds last year and over $104 million in 2006!!!!"
More information was available from their web site:
In their 2008 second quarter Earnings Release, overall loan production was reported as decreasing 48% from the same period in 2007. The problems for home equity were clear:
"Net charge-offs were $323 million in the second quarter of 2008... The increase in net charge-offs in 2008 was most pronounced in home equity and residential mortgages."
"Retail and Commercial Banking net income for the second quarter of 2008 was $110.7 million, a decrease of $88.9 million, or 44.5%, compared to the second quarter of 2007. This decrease was primarily the result of higher provision expense due to home equity line net charge-offs and lower net interest income related to deposit spreads, partially offset by higher noninterest income."
Please contact us if you have more details about the number of employees that are being affected.
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Tobby at 15:32 2008-07-24 said:This product was killed when the CLTV max was set to 80%. Although these types of loans are good business, there is still no effective secondary market for them. Thus the "strategic" realignment. Permalink
flmortgageguy at 21:13 2008-07-24 said:Another factor why people is unable to use this loans... is because the value of the properties when down too much and too fast! Permalink
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Important: This company is on our list of lending operations that have "imploded". However, please note that "imploded" is a somewhat subjective and does not necessarily mean operations are ceased permanently: it can mean bankruptcy filing, temporary but open-ended halting of major operations, or "firesale" acquisition. All information here is provisional, and may contain inaccuracies (especially newer information). If you are planning on doing business with this company or any other one listed on this site, you should inquire with them directly on whether they can still meet your needs. Many are still operating in some capacity.