The bank agreed Tuesday to settle to the tune of almost $1 billion, with $2 million separately going out to some 2,500 individuals who had unnecessarily lost their homes due to the property mistakenly being placed on foreclosure. This redounds to a settlement of about $800 per borrower. According to federal regulators, SunTrust had taken a lot of shortcuts, including the so-called process of “robo-signing”, or mass production of foreclosure documents, hence the lofty settlement.
“People who take out a mortgage expect and deserve fair treatment,” read a prepared statement from U.S. Attorney General Roy Cooper. “Thanks to this agreement, deserving homeowners will get direct relief and future borrowers will get better protections.” SunTrust will settle to the tune of $550 million to state officials and to the U.S. Housing and Urban Development. This is in relation to a settlement in connection with a $25 billion deal agreed upon by several major financial institutions in 2012, including Bank of America Corp. (NYSE: BAC) and Wells Fargo & Co. (NYSE: WFM).
SunTrust also has to pay the U.S. Department of Justice $418 million worth of remuneration in relation to a similar, yet separate settlement over the faulty origination of government-sponsored loans.
In an official statement, SunTrust Chief Executive William H. Rogers Jr. expressed pleasure in his bank having come to an agreement with regulators. “Like most major financial institutions, we are addressing issues related to mortgage matters stemming from the financial crisis and recession period,” he added.