Grasek on Monday upgraded the Atlanta lender to an "Overweight" rating from "Equal Weight," while raising her price target for the shares by two dollars to $29, saying that the "Street is underestimating the strength of this refi cycle," and that the stock is "pricing in falling mortgage origination revs through 2012."
For the first quarter, SunTrust reported $63 million in mortgage production income, compared to mortgage losses of $62 million in the fourth quarter, when the company increased its mortgage repurchase provision. The big drive for increased mortgage loan origination is the Home Affordable Refinance Program, or HARP, which was expanded by President Obama during the first quarter to allow qualified borrows with mortgage loans held by Fannie Mae (FNMA) or Freddie Mac (FMCC) to refinance their entire loans balances, no matter how much the value of the collateral property has declined.
Graseck expects that "high gain-on-sale margins" on sales of new loans, primarily to Fannie Mae, "+ high refi demand + declining
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV