SunTrust has reached a huge settlement with the Department of Housing and Urban Development, the Justice Department and the Federal Reserve over alleged mortgage violations
SunTrust Banks Inc. is ponying up more than $1bn to settle allegations of various mortgage violations, according to a NASDAQ report.
The bank announced Thursday that it had reached agreements with the Department of Housing and Urban Development, the Justice Department and the Federal Reserve to pay $468 million in cash and $500 million in relief to borrowers. The bank also agreed to pay more than $200 million to settle claims by Fannie Mae and Freddie Mac, NASDAQ reported.
“SunTrust is pleased to have resolved a number of legacy mortgage matters,” William Rogers Jr., chairman and chief executive of SunTrust, said in a statement Thursday. “These settlements reduce uncertainty, further improve our risk profile, and enhance our ability to focus on future growth.”
Some of the money is being paid to resolve allegations that SunTrust mishandled homeowners’ loans. SunTrust said it plans to tie that money -- $168 million – to the National Mortgage Settlement, a landmark deal between five banks and 49 states and federal regulators to resolve allegations of “robo-signing” foreclosure documents.
The settlements with Fannie and Freddie are over allegations that SunTrust sold shoddy loans to the companies, according to NASDAQ.