SunTrust Banks has signed a definitive agreement to settle certain legacy mortgage matters with the US Department of Housing and Urban Development and the US Department of Justice (DoJ).
Under the terms of the agreement, the firm has resolved claims pertaining to SunTrust’s origination of FHA-insured mortgages and SunTrust’s portion of the National Mortgage Servicing Settlement.
According to SunTrust, it will offer $500m for consumer relief and a cash payment of $468m. The company will also not incur an incremental charge relative to the financial commitments previously disclosed.
SunTrust chairman and CEO William Rogers said, "As we said when these agreements in principle were announced, we are pleased to have resolved these legacy mortgage matters."
"Like most major financial institutions, we are addressing issues related to mortgage matters stemming from the financial crisis and recession period."
The company also noted that it has made considerable improvements to its mortgage underwriting processes and internal controls over the past several years.
New measures implemented by the firm includes increased training and the establishment of a center of specialization to underwrite all government-insured mortgages, enabling to enhance quality control and significantly reduced error rates.