Oct. 15--SunTrust Banks said Tuesday it will eliminate 800 jobs nationwide, including in Charlotte, the result of a slowdown in its home loan refinancing business.
The Atlanta-based company declined to disclose how many jobs would be eliminated in Charlotte or specific locations, such as its loan sales center near Charlotte Douglas International Airport. A year ago, the bank announced plans to boost employment at the center by 100, back when the refinancing boom was still going strong.
But with mortgage rates rising this year, lenders have seen weakening demand for refinancings. That has led banks, including Charlotte-based Bank of America and San Francisco-based Wells Fargo, to trim the work force that processes those applications.
SunTrust gave mortgage employees the news last week, bank spokesman Michael McCoy said. The positions will be eliminated in the coming months, likely into the first quarter.
"We are adjusting the staffing in our mortgage business to reflect the current market conditions," McCoy said. "It's clear that the business has changed dramatically over the last several months."
McCoy said some of the 800 positions will be lost through attrition, although he declined to give a percentage.
Richmond, Va., is among the other SunTrust markets affected by the 800 cuts. McCoy said the employees can apply for other positions in the company, and people who lose their jobs will receive severance pay and outplacement assistance.
The SunTrust announcement comes as other banks are reporting lower refinancing revenue in their third-quarter results, the effect of higher mortgage rates making it less attractive for borrowers to refinance.
Last week, Wells Fargo said its applications for refinancings were cut by half in the third quarter from a year ago. Bank of America is scheduled to announce its third-quarter earnings results Wednesday, and SunTrust's results come out Friday.
New York-based Citigroup said Wednesday that "significantly lower" U.S. refinancing activity contributed to its global consumer banking revenues falling 7 percent in the third quarter from a year ago.
As refinancing activity has slumped, Charlotte and elsewhere have been hit by job cuts as banks eliminate employees in their mortgage divisions. In August and September, Wells Fargo announced a total of 434 mortgage-related layoffs in the region as it also slashed thousands of jobs nationwide. Bank of America has also cut mortgage-related jobs nationwide, including hundreds in Ohio in August. But only four positions in North Carolina were affected at that time, the bank said.
U.S. banks beefed up their mortgage operations in recent years to meet refinancing demand. Rates are still near historic lows, but they are higher than they have been in recent years. In September, rates were at 4.49 percent for the average 30-year fixed loan, up from 3.41 percent at the start of the year, according to Freddie Mac.