June 17, 2014

Feds ask $540M against SunTrust over servicing

June 18, 2014 – CFPB, the Justice Department, Department of Housing and Urban Development and attorneys general for 49 states and the District of Columbia want a federal court to order more than $500 million in fines and relief against SunTrust Mortgage Inc. over mortgage servicing practices.

Whether SunTrust has to pay depends on whether the order is signed by the judge.

Of a total $540 million recommended, $500 million would be assessed as loss-mitigation relief to underwater borrowers. The order would also require SunTrust to pay $40 million about 48,000 consumers who lost their homes in foreclosure and $10 million in fines paid to the federal government.

CFPB, in a release, said the proposed order – which is not a ruling that SunTrust violated the law – addresses allegations of systemic mortgage servicing misconduct, including robo-signing and illegal foreclosure practices.

SunTrust was also assessed a $418 million penalty in a parallel mortgage lending filing by the Justice Department.