NEW YORK ( TheStreet) -- It's time for investors to buy shares of SunTrust ( STI), as the bank's coming cost savings from the housing recovery is not reflected in consensus earnings estimates, according to Deutsche Bank analyst Matt O'Connor. O'Connor on Friday upgraded SunTrust of Atlanta to a "buy" rating from a "neutral" rating, while raising his price target for the shares to $39 from $36, saying in a note to clients that based on 2015 earnings estimates, the stock trades at "a 15% discount to peers." The analyst raised his 2014 earnings estimate for SunTrust to $2.91 a share from $2.75, and raised his 2015 EPS estimate to $3.46 from $3.21. A major theme for banks in the third quarter is the huge decline in mortgage refinancing applications, as long-term interest rates rise. This theme is expected to continue over the next year. According to its latest mortgage forecast, the Mortgage Bankers Association expects total mortgage refinance volume in the United States to decline from $1.247 trillion in 2012 to $973 billion in 2013 and $388 billion in 2014. The MBA expects total mortgage loan origination volume to fall from $1.750 trillion in 2012 to $1.592 trillion this year and $1.091 trillion in 2014. Those are major declines, leading Wells Fargo ( WFC) recently to announce 2,300 layoffs of loan origination staff. Bank of America ( BAC) has also recently announced mortgage lending-related layoffs. "Mortgage production revenue seems likely to decline sharply at STI and others," O'Connor wrote, "However, while production revs have been strong at STI in recent periods, STI's mortgage line-of-business overall has generated a net loss of $96m reflecting depressed servicing fees, elevated environment costs/operating losses and higher than normal other default servicing related costs (personnel related)." The bottom line is that even though he expects SunTrust's mortgage origination revenue to decline by 50% by the end of the year, O'Connor expects the company's total mortgage revenue to decline by only 15% to 20%, as losses tied to soured loans decline. Deutsche Bank's earnings estimates for SunTrust also factor in "a sharp rise in servicing fees (from $39m to $120m or from just 7bps of assets serviced (annualized) to 20bps) given a slowdown in amortization rates (as rates rise)."