A major mortgage servicer has reached a $968 million settlement with federal authorities and 49 states — including Connecticut — over abusive home lending, servicing and foreclosing practices, it was announced Tuesday.
SunTrust Banks Inc. has reached a three-year settlement with federal regulators, attorneys general in 49 states and the District of Columbia that includes $550 million for borrowers who suffered foreclosure abuses.
The settlement provides for direct cash payments to some borrowers for foreclosure abuses, plus loan modifications and other relief. In addition, SunTrust must comply with stricter mortgage servicing standards, subject to review by an independent mortgage monitor.
“While we cannot prevent every home foreclosure, attorneys general from across the country — in partnership with the federal government — continue to hold servicers accountable and to provide relief to families wherever possible,” Jepsen said.
Connecticut Attorney General George Jepsen said about 150 borrowers in the state could qualify for a cash payment as a result of the settlement with SunTrust.
Jepsen’s office could not estimate Tuesday Connecticut’s share of the $550 million, but the state’s share is expected to be modest because SunTrust does not have a branch presence in the state.
Eligible borrowers will be contacted on how to apply for payments under the settlement. Current Suntrust borrowers can contact the the bank at 1-800-634-7928 or by email through the “Support” page at www.SunTrustMortgage.com with questions about principal reductions and loan modifications.
In a statement, SunTrust said Tuesday it is addressing problems in its mortgage servicing business, including underwriting and “internal controls.”
The settlement follows a landmark national mortgage settlement with major servicers in 2012. The settlement has provided $51 billion in relief to borrowers nationally and about $450 million to almost 6,300 borrowers in Connecticut, Jepsen said.