SunTrust Banks Inc. (NYSE: STI) announced more job cuts in its mortgage department, as the bank continues to right-size its home loan operations, according to a spokesperson for the institution. The job cuts, according to the spokesman, include 100 in the Richmond, Va. area, and are part of 800 layoffs to be made nationwide, as refinancing activity remains lugubrious in comparison to previous months.
“The 800 jobs are in addition to what we have already done,” said SunTrust spokesman Michael McCoy, who made reference to another 100 mortgage workers who were laid off in the summer. The bank, which is based in Atlanta, has its mortgage arm headquartered in South Richmond. McCoy admitted that he is not sure how many people are employed in the South Richmond offices, but noted that nationwide, SunTrust’s mortgage division is 4,200-strong at the present.
“We expect attrition to account for a portion of the job cuts,” added McCoy. “The cuts reflect market conditions, particularly the reduced value of mortgage refinancings.” He told reporters some of that the affected employees were informed last week about the job cuts, but many others will only be given notifications toward the end of October regarding the layoffs.
“They will be able to post for other positions at SunTrust and, if they are displaced, severance and outplacement assistance will be provided,” said McCoy, hinting at the possible option of repurposing to another department.
SunTrust’s announcement of job cuts is just one of several made amid reports of slower refinance activity, as the mortgage market reels from a spike in mortgage rates that started late this spring, but truly manifested itself in the summer months. Though recent industry analytics have shown a slight increase in refinance activity, figures still remain far removed from their levels prior to the start of the rate hikes in May.