Sterling Bank & Trust’s mortgage lending partner has closed to new business just a few months after the Michigan-based bank announced an outsourcing agreement.
Promontory MortgagePath, a specialist digital mortgage lending platform, announced last week that it was to close its doors, seven years after it was established.
A spokesperson for Promontory cited “unprecedented and rapid mortgage market deterioration” for the closure, in a statement reported by industry publication National Mortgage Professional last week.
Sterling Bank & Trust appointed Promontory as its outsourced lending provider earlier this year, according to a statement from the bank.
The bank will continue to accept loan applications via Promontory until the end of November.
Thomas O’Brien, Sterling’s chairman, president and CEO, said: “We enjoyed our partnership but understand Promontory’s challenges and the current economic impact on the entire mortgage industry. Sterling is committed to our customers and will continue to work closely with Promontory throughout this transition.”
The development follows a series of interest rate hikes this year as the Federal Reserve attempts to combat sharply rising inflation.
Last week, Wells Fargo reported a significant drop in the number of loans in progress and its mortgage pipeline. The bank relies heavily on mortgage revenues in comparison to its largest competitors.
In October, a spokesperson for Wells Fargo indicated that the present market may lead to job cuts. In a statement, they said: “The changes we’ve recently made are the result of the broader rate environment and consistent with the response of other lenders in the industry. We regularly review and adjust staffing levels to align with market conditions and the needs of our businesses.”