Several major banks saw mortgage application rates plummet in recent weeks as refi activity continued to slow, according to a NASDAQ report.
SunTrust Banks Inc. saw mortgage applications decline by 40% in July and August, and SunTrust Chairman and CEO William Rogers Jr. said Tuesday that he expects continued profitability challenges, NASDAQ reported.
JPMorgan Chase’s mortgage originations are also on a pace to drop by 40% in the second half of 2013, according to NASDAQ, while Wells Fargo recently announced that it expects originations to drop by about $32bn -- nearly 30% -- in Q3. And M&T Bank Corp. Chief Financial Officer Rene Jones told investors Monday that she expected “significant” declines in mortgage banking volume in the third quarter.
Earlier this year, low interest rates prompted a refinancing boom that prompted many big banks to add jobs in order to keep up with the demand. However, refi activity dried up in the second quarter, and major lenders like Wells Fargo and JPMorgan have announced thousands of layoffs in their mortgage units. On Monday, Bloomberg reported that Bank of America – the nation’s second-largest lender -- would lay off about 2,100 employees by Oct. 31 and shutter 16 mortgage offices.