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NC homeowners to get up to $21.5 million in relief from SunTrust, AG Cooper announces

Release date: 6/17/2014

Funds part of $550 million multistate agreement to help right foreclosure wrongs

Raleigh: A national settlement with SunTrust worth $550 million will bring as much as $21.5 million in relief to North Carolina homeowners and prevent future foreclosures and mortgage abuses, Attorney General Roy Cooper said today.

The settlement with mortgage lender and servicer SunTrust Mortgage, Inc includes 48 other states, the District of Columbia, and federal officials and will provide direct payments to foreclosure victims as well as loan modifications and other relief for borrowers. Under the agreement, SunTrust must also meet tougher mortgage servicing standards designed to prevent future problems for homeowners.

“People who take out a mortgage expect and deserve fair treatment,” Cooper said.  “Thanks to this agreement, deserving homeowners will get direct relief and future borrowers will get better protections.”

Relief for consumers
SunTrust is required by the agreement to provide North Carolina borrowers an estimated $ 21.5 million worth of loan modifications or other relief.  More information about the loan modification process will be provided later, though current borrowers with loans serviced by SunTrust can contact the company directly with questions at 800-634-7928 or by email through the support page at www.SunTrustMortgage.com.

In addition, an estimated 2,449 North Carolinians who lost their homes to foreclosure will be eligible for direct cash payments totaling approximately $2 million. Consumers may be eligible if their mortgage was serviced by SunTrust, they encountered servicing abuses, and they lost their home to foreclosure from January 1, 2008 through December 31, 2013. Direct payments to foreclosure victims will come from a national $40 million fund created under the settlement.

North Carolinians who are eligible for direct relief from the settlement will be contacted by a settlement administrator about how to qualify for payments.  The amount paid to each foreclosure victim will depend on the total number of claims filed.

Stronger Mortgage Servicing Standards
Under the settlement, SunTrust must also make substantial changes to how it services mortgage loans, handles foreclosures, and ensures the accuracy of information provided in federal bankruptcy court.  These changes are expected to prevent past foreclosure abuses, such as robo-signing, improper documentation and lost paperwork, from happening again.
 
The settlement creates several new consumer protections and standards, including:

  • Making foreclosure a last resort by requiring SunTrust to evaluate homeowners for other options first;
  • Restricting foreclosure while the homeowner is being considered for a loan modification;
  • Establishing new procedures and timelines for reviewing loan modification applications;
  • Giving homeowners the right to appeal denials;
  • Requiring a single point of contact for borrowers seeking information about their loans and maintaining adequate staff to handle calls.

More about the settlement
The agreement with SunTrust will be filed as a consent judgment in the U.S. District Court for the District of Columbia.  SunTrust, headquartered in Richmond, Virginia, is a wholly-owned subsidiary of SunTrust Banks Inc., a bank and financial services company headquartered in Atlanta, Georgia.

Today’s settlement with SunTrust is based on a 2012 national settlement negotiated by Cooper with the five largest mortgage servicers at the time, Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo. The National Mortgage Settlement resulted in new standards to prevent unnecessary and improper foreclosures and has so far provided more than $50 billion in relief to distressed homeowners.  In North Carolina, the settlement provided $338 million for housing counselors, legal help, fraud detection and prosecution, and economic improvement as well as $33.57 million in direct payments to foreclosure victims.

North Carolina also helped negotiate a similar settlement last year with Ocwen Financial Corporation, worth $2.1 billion nationally and $26 million in North Carolina.

Joseph A. Smith, Jr., Monitor of the National Mortgage Settlement and former North Carolina Commissioner of Banks, will oversee the SunTrust agreement’s implementation and compliance through the Office of Mortgage Settlement Oversight.

“Today’s agreement plus our earlier settlements are holding banks accountable for past mortgage servicing and foreclosure problems and preventing future ones,” Cooper said.


Media contact: Noelle Talley (919) 716-6413