$550 MILLION JOINT STATE-FEDERAL SETTLEMENT REACHED WITH SUNTRUST MORTGAGE INC.
LITTLE ROCK – Attorney General Dustin McDaniel announced today that Arkansas, other states and the federal government have reached an agreement with SunTrust Mortgage Inc. to settle allegations of misconduct by the mortgage lender and servicer.
SunTrust will provide direct payments to borrowers directly affected by the lender’s foreclosure practices and will offer loan modifications and other relief to borrowers. The lender will be required to implement tougher new mortgage servicing standards.
The $550 million settlement includes 49 states and the District of Columbia, the U.S. Department of Justice, the U.S. Department of Housing and Urban Development and the federal Consumer Financial Protection Bureau.
The settlement is expected to result in an estimated $450,000 in refinancing opportunities, loan modifications, and other relief to Arkansas consumers.
“Attorneys general from across the country have been working together for several years now to hold accountable those who are responsible for deceiving consumers and contributing to our nation’s recent housing crisis,” McDaniel said. “This settlement is another example of that effort, which will continue. We are committed to pursuing legal action against mortgage lenders and servicers that engage in abusive practices.”
The agreement requires SunTrust to substantially change how it services loans. The company will also be prohibited from engaging in practices such as “robosigning” of documents.
Many of the consumer protections to be implemented by SunTrust as a result of the settlement are already in place in Arkansas. The General Assembly in 2011 enacted legislation requiring mortgage servicers to provide homeowners at risk of foreclosure with important documents prior to foreclosure. That bill was a part of McDaniel’s legislative package that year.
The terms of the agreement with SunTrust largely mirror those of the National Mortgage Settlement reached in 2012 between the nation’s attorneys general and the five largest national mortgage servicers. The 2012 settlement resulted in more than $50 billion in direct relief to borrowers, new servicing standards and independent oversight of the lenders.
SunTrust will be required to provide relief including principal reductions and refinancing for underwater mortgages. Consumers with loans serviced by SunTrust may contact the company directly with questions about the loan modification process.
Arkansas borrowers whose loans were serviced by SunTrust and who lost their homes to foreclosure between Jan. 1, 2008, and Dec. 31, 2013, may be eligible for a direct payment. Eligible borrowers will be contacted directly about how to qualify for payments.