Friday, November 21, 2014

SunTrust Reaches $320 Million Settlement for Delayed Loan Modifications

Earlier this year, SunTrust Banks and federal prosecutors reached a settlement agreement after an investigation into the bank servicing practices found chronic delays in approving loan modifications, according to an article published in the New York Times. The almost $320 million SunTrust bank will be required to pay will go toward housing counseling services, as well as consumer relief. Thousands of consumers may be affected by this negotiation settlement. If you or someone you know is struggling to keep up with mortgage payments, contact a Mt. Prospect loan modification attorney today for an initial consultation on your rights and obligations.

Home Affordable Modification Program

The time-intensive investigation conducted by federal prosecutors and investigators from several branches of the federal government found that Atlanta-based SunTrust Bank delayed processing applications of struggling homeowners; additionally, SunTrust Bank was found to have made misrepresentations to financially strapped owners seeking loan modification. Just like other large banks in the United States, SunTrust Bank was issuing modifications through the government’s Making Home Affordable Program (MHAP). MHAP was designed to keep underwater homeowners from losing their real estate by modifying the terms of the original loan.

Details of the settlement agreement are specific and targeted at numerous issues including restitution, education, and government refund. Particular details of the settlement include SunTrust providing between $179 million and $274 million in consumer restitution, $20 million being placed in a fund dedicated to distributing dollars to organizations that provide housing counseling services for consumers, a $10 million payment being made to Fannie Mae and Freddie Mac, and $16 million being forfeited to the Treasury Department. According to the government, of the approximately 26,000 borrowers who applied to SunTrust for a loan modification, thousands will be eligible for relief.

In response to the settlement, SunTrust Bank conceded to deficiencies in administering the federal loan modification program and assured the public it has implemented changes that will improve efficiency and transparency.

We Are Here to Help

Loan modification is complicated. If you or someone you know is facing foreclosure, contact a Mt. Prospect real estate attorney today to learn about your rights and obligations during the loan modification process. The attorneys at the Law Offices of Gilbert C. Schumm have decades of experience providing legal guidance in all types of real estate transactions. Contact the firm today at (847) 559-9109 to schedule your initial consultation.

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