SunTrust To Pay Nearly $1B To Settle Mortgage Fraud Claims

Law360, New York (June 17, 2014, 5:19 PM EDT) -- SunTrust Mortgage Inc. agreed to pay $968 million to settle mortgage origination fraud and foreclosure abuse claims after admitting to the harmful practices, the U.S. Department of Justice and several other departments said Tuesday.

The SunTrust Banks Inc. subsidiary originated and underwrote Federal Housing Administration insured mortgages that didn't meet FHA requirements between 2006 and 2012, according to a confession obtained by the DOJ. Its practices also pushed families into foreclosure, the DOJ said. About $550 million of the settlement will go to consumer relief for homeowners and $418 million will be used to resolve the claims over its actions, which...

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