Friday, October 11, 2013

SunTrust "Settles Mortgage Claims for More than $1B

SunTrust Banks settled mortgage fraud charges with the government by agreeing to pay more than $1 billion.  The settlement involved the Department of Justice, the Department of Housing and Urban Development, and the Federal Reserve.  The settlement includes $468 million in cash payments and $500 million in mortgage borrower relief.  Additionally, SunTrust will pay $200 million to resolve issues with Fannie Mae and Freddie Mac.  Finally, $160 million of the settlement will be applied to the mishandling of loans. 
 
The portion being apportioned for the $160 million for mishandling of loans involves the bank joining the $25 billion settlement between several banks and 49 states entered into in 2012 that stemmed from the practice of "robo-signing foreclosure documents.  SunTrust becomes the first bank to join the 2012 settlement since its original signing.
 
For a detailed article about the settlement, please see the Wall Street Journal, "SunTrust Settles U.S. Mortgage Claims," October 11, 2013, page C3.

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