"SunTrust reaches settlement on mortgage modifications" by Matthew Goldstein | New York Times July 04, 2014
NEW YORK — Federal prosecutors and SunTrust Banks reached a settlement Thursday in a criminal investigation into the bank’s tardiness in approving mortgage modifications. The bank will pay as much as $320 million for a combination of consumer relief and housing counseling services.
The agreement stems from an investigation by federal prosecutors in Virginia into SunTrust’s compliance with the Home Affordable Modification Program, one of several initiatives enacted by the Obama administration to encourage banks to modify loans for struggling homeowners after the financial crisis.
Related(?): Virginia Still a Hot Topic With Globe
Federal prosecutors and investigators from several other federal government agencies found that SunTrust, which is based in Atlanta, not only acted slowly in processing borrower applications for mortgage modifications but also made misrepresentations to homeowners. Most of the money being paid by the bank under the settlement will go toward a fund to compensate borrowers who were shortchanged by SunTrust.
We call it LYING here.
“SunTrust has done the right thing by agreeing to this novel package of restitution, remediation, and prevention, which represents a significant victory not only for SunTrust customers, but also for Americans who will receive counseling and other assistance when faced with financial challenges,” Timothy J. Heaphy, the US attorney for the Western District of Virginia, said in a statement.
The deal will require SunTrust to provide at least $179 million, and as much as $274 million, for consumer restitution. The bank will also provide $20 million to a fund that will distribute money to organizations that provide housing counseling services. SunTrust also will make a $10 million payment to Fannie Mae and Freddie Mac, two government-sponsored mortgage finance companies.
Finally, SunTrust will forfeit $16 million to the Treasury Department.
SunTrust said in a press release that it would take a $204 million pretax charge in the second quarter to cover the cost of the agreement. The bank said it had acknowledged weaknesses in its administration of the loan program and has put in place procedures to correct the deficiencies.
Oh, they get to write the agreement off their taxes, huh?
Nothing like rewarding criminality.
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Day is looking brighter already.
