States reach $550 Million Joint State-Federal Settlement with SunTrust
JACKSON, Miss. (Press Release) — Attorney General Jim Hood today announced a $550 million joint state-federal settlement with mortgage lender and servicer SunTrust Mortgage Inc. to address mortgage origination, servicing, and foreclosure abuses.
The three-year settlement provides direct payments to Mississippi borrowers for past foreclosure abuses, loan modifications and other relief for borrowers in need of assistance, tough new mortgage servicing standards, and grants oversight authority to an independent monitor.
The settlement includes Mississippi, 48 other states, the District of Columbia, the U.S. Department of Justice (DOJ), the U.S. Department of Housing and Urban Development (HUD), and the Consumer Financial Protection Bureau (CFPB).
“This settlement holds a major mortgage servicer accountable for its unacceptable past practices, and provides direct relief to Mississippi borrowers,” said Attorney General Hood. “And SunTrust must treat its borrowers much more fairly because of the settlement’s tough servicing standards.”
The agreement requires SunTrust to provide certain Mississippi borrowers with loan modifications or other relief. The modifications, which SunTrust chooses through an extensive list of options, include principal reductions and refinancing for underwater mortgages. SunTrust decides how many loans and which loans to modify, but must meet certain minimum targets. Because SunTrust receives only partial settlement credit for many types of loan modifications, the settlement will provide relief to borrowers that will exceed the overall minimum amount.
Anyone with questions about the loan modification process should contact SunTrust directly. The toll-free number is 1-800-634-7928, and the website is www.SunTrustMortgage.com.
Payments to Borrowers
Eligible Mississippi borrowers whose loans were serviced by SunTrust and who lost their home to foreclosure from January 1, 2008 through December 31, 2013 and encountered servicing abuse will be eligible for a payment from the national $40 million fund for payments to borrowers. The borrower payment amount will depend on how many borrowers file claims.
Eligible borrowers will be contacted about how to qualify for payments.
The agreement’s mortgage servicing terms largely mirrors the 2012 National Mortgage Settlement (NMS) reached in February 2012 between the federal government, 49 state attorneys general, including Mississippi, and the five largest national mortgage servicers. That agreement has provided consumers nationwide with more than $50 billion in direct relief, created tough new servicing standards, and implemented independent oversight.