SunTrust to Settle Mismanaged Mortgage Claims - NBC29 WVIR Charlottesville, VA News, Sports and Weather

SunTrust to Settle Mismanaged Mortgage Claims

Posted: Updated:

SunTrust now owes big bucks after it mismanaged mortgages during the housing crisis several years ago.

The investigation began with complaints from central Virginia. The announcement happened in Charlottesville but people all across the country are affected.

SunTrust Mortgage has to pay $320 million to customers, federal agencies, and Fannie Mae and Freddie Mac. During the housing crisis in 2009 and 2010, it gave customers the option to come up with their own mortgage rates through a federal program called Home Affordable Modification Program (HAMP). SunTrust Mortgage promised to let those customers know quickly whether that rate would be OK, but weren’t able to get back to them quickly enough because of the overwhelming amount of requests.

So a lot of people just started paying the rates they’d picked out, but SunTrust later came back and said they owed more money because those rates were just too low. It all happened at the height of the recession so many of those people ended up in big financial trouble.

"We are providing restitution to the victims of the mismanagement but we're also doing what we can to prevent future problems, to provide real relief to homeowners who in the future might be struggling to stay in their home,” said U.S. Attorney Tim Heaphy, the prosecutor in the case.

The investigation started nearly two years ago when customers in central Virginia complained and it’s still going on. Federal investigators estimate there are about 20,000 victims nationwide.

SunTrust Mortgage has fired most of the executives that were working at the time of the HAMP issue.

  • SunTrust to Settle Mismanaged Mortgage ClaimsMore>>

  • Sign Up for Email Alerts

    Sign up to receive NBC29 news and weather updates in your inbox daily.

    * denotes required fields

    Thank you for signing up! You will receive a confirmation email shortly.
Powered by WorldNow
All content © Copyright 2000 - 2014 WorldNow and WVIR. All Rights Reserved. For more information on this site, please read our Privacy Policy and Terms of Service.