WASHINGTON (6/18/14)--The Consumer Financial Protection Bureau, along with the U.S. Department of Justice, Department of Housing and Urban Development and attorneys general in 49 states and the District of Columbia, filed a proposed federal court order requiring SunTrust Mortgage, Inc. to provide more than $540 million in relief to homeowners in response to servicing wrongs.
In addtion to the $540 million to homewners--$500 million in loss-mitigation relief to underwater borrowers and $40 million to approximately 48,000 consumers who lost homes to foreclosure--the order also requires SunTrust to provide $10 million to the federal government. A CFPB release says the parties filing the order uncovered substantial evidence that SunTrust was engaged in systemic mortgage servicing misconduct.
According to the CFPB, the joint complaint against Sun Trust "is not a finding or ruling that the defendants have actually violated the law. The proposed federal court order will have the full force of law only when signed by the presiding judge."
The complaint, filed in the federal district court in the District of Columbia, alleges that SunTrust:
Under the terms of the proposed order, SunTrust must:
The agreement only covers SunTrust's violations before Jan. 10, 2014, when the CFPB's new mortgage servicing rules took effect. It does not prevent the CFPB from pursuing civil enforcement actions against SunTrust for violations of these rules.
The Department of Justice also announced Tuesday SunTrust must pay a $418 million penalty in a parallel mortgage lending filing.