Economics & Economy
Fri July 4, 2014
SunTrust Mortgage Agrees to a Settlement with Homeowners
The U.S. Attorney for Virginia’s Western District has won a settlement with Sun Trust Mortgage, which was under investigation for failing to help struggling homeowners as promised. Those customers may now be getting payments from Sun Trust.
In response to the mortgage crisis of 2008, the Treasury Department gave Sun Trust money to help homeowners restructure their loans. The Richmond based firm allowed thousands of customers to make lower payments while it considered their applications to the Home Affordable Modification Program or HAMP. When they were eventually rejected, they owed even more, there were foreclosures that were improper. There was credit reporting that these folks were delinquent when in fact they were being told to make a lower monthly payment. Homeowners were prevented from pursuing other ways of stabilizing their situation and staying in their home. They were relying on the promises made by Sun Trust and HAMP. Sun Trust has not admitted guilt. Instead, Heaphy says, it’s agreed to pay customers various amounts for their past troubles and to launch a prevention program for those who can’t pay in the future. They’re also establishing a $20 million grant fund that will go to local housing agencies … prevention fund
Heaphy says Sun Trust has changed management and put policies in place to assure this doesn’t happen again. He values the total settlement at up to $320 million.