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MADISON — Attorney General J.B. Van Hollen 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 with Wisconsin and 48 other states, the District of Columbia, the U.S. Department of Justice (DOJ) and the U.S. Department of Housing and Urban Development (HUD) provides direct payments to 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.
“This settlement will provide much needed relief to hundreds of SunTrust consumers in Wisconsin who have lost homes to foreclosure or who are struggling to make mortgage payments,” Attorney General Van Hollen said.
SunTrust Agreement Closely Mirrors National Mortgage Settlement
The agreement’s terms emulate the 2012 National Mortgage Settlement (NMS) reached in February 2012 between the federal government, 49 state attorneys general, including Wisconsin, and the five largest national mortgage servicers. Wisconsin consumers have reaped more than $197 million in benefits from that settlement, and nationally, it has provided consumers more than $50 billion in direct relief to consumers. Additionally, the SunTrust agreement, like the NMS, will implement new servicing standards and independent oversight.
Benefits to Wisconsin Borrowers
The agreement requires SunTrust to provide Wisconsin borrowers with loan modifications or other relief, which will include principal reductions and refinancing for underwater mortgages. SunTrust will decide which consumers will be offered relief but must meet certain minimum targets.
Current borrowers with loans serviced by SunTrust can contact the company directly with questions at 800-634-7928 or www.SunTrustMortgage.com.
Approximately 321 Wisconsin 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. 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 will be filed as a consent judgment in the U.S. District Court for the District of Columbia.
Wisconsin residents who have questions about the National Mortgage Settlement or the SunTrust Settlement are encouraged to contact the Wisconsin Department of Justice (DOJ) at: firstname.lastname@example.org, 800-998-0700 or 608-266-1852. The DOJ has a trained staff available to assist consumers and provide resources.
Assistant Attorney General Holly Pomraning represents the state in these matters and serves as the DOJ's Special Assistant Attorney General for Mortgage Foreclosure Mitigation.