July 07, 2014

SunTrust to pay $320M for HAMP violations

July 8, 2014 – SunTrust Mortgage will pay $320 million in order to resolve the Justice Department's investigation into its misleading of homeowners interested in the federal Home Affordable Modification Program, or HAMP.

The settlement will be broken up into up to $284 million for consumer restitutions, $20 million in grant money for agencies helping distressed homeowners, and $16 million in asset forfeiture funds for use in future mortgage fraud investigations by the government. SunTrust Mortgage is the mortgage-focused entity under SunTrust Banks.

According to the Justice Department report, "SunTrust made material misrepresentations and omissions to borrowers in HAMP solicitations, and failed to process HAMP applications in a timely fashion."

The company allegedly misrepresented how long it would take to determine if a borrower were qualified for HAMP, and how the trial period for the program worked. This resulted in damage to consumers' credit scores and improper foreclosures, as well as preventing the borrower from making an informed decision about and participating fully in the program.