Former SunTrust mortgage borrowers to begin receiving settlement payments
Attorney General Mark R. Herring announced today that more than 1,980 Virginia borrowers who were harmed by mortgage servicing and foreclosure practices of SunTrust Mortgage, Inc. will begin receiving checks of approximately $1,330 as part of a settlement negotiated by Attorney General Herring and the attorneys general of 48 other states, the District of Columbia, and the federal government.
Eligible borrowers included those who had mortgages serviced by SunTrust and who lost their homes to foreclosure between January 1, 2008 and December 31, 2013. Check distribution began on Tuesday, December 8 and all checks should be received by consumers in the coming weeks.
“Our nation and our Commonwealth are still recovering from the effects of the housing crisis, but settlements like this have helped provide some measure of relief as well as critical changes in the way mortgage servicing companies do business,” said Attorney General Herring. “Borrowers who qualified for the settlement should keep a close eye out for their settlement payments, as well as any potential scams related to this settlement because high profile settlements can attract dishonest criminals trying to take advantage of the situation.”
SunTrust agreed to a national settlement with the Commonwealth of Virginia, 48 other states and the District of Columbia, and the federal government following state and federal investigations which alleged numerous violations in its servicing of mortgages and its foreclosure procedures. The $550 million settlement, which was filed as a Consent Judgment in the U.S. District Court for the District of Columbia in June 2014, made $40 million available for approximately 45,000 borrowers nationwide who lost their homes to foreclosure during that period and had their loan serviced by SunTrust.
Attorney General Herring sent claim forms to eligible Virginia borrowers in March 2015 with a filing deadline of June 2015. Every consumer who filed a claim should receive a written response from the settlement administrator. Those whose claims were approved will receive a check. Those whose claims were denied will receive a letter informing them that they were found ineligible. Anyone who receives a check or a letter and who still has questions is encouraged to call the Settlement Administrator toll-free at 1(866) 590-8532.
Beware of scams
Attorney General Herring also warns all homeowners to be aware of settlement-related scams. Borrowers should closely examine any interactions or correspondence they receive to ensure it is legitimate and not a scammer trying to take advantage of this high-profile settlement. Do not provide personal information or pay money to anyone who calls or emails you claiming that they are providing settlement-related assistance. If you believe someone is conducting a settlement-related scam, call Attorney General Herring’s Consumer Protection Hotline at (800) 552-9963.
The SunTrust national settlement followed state and federal investigations, which alleged that SunTrust routinely signed foreclosure-related documents outside the presence of a notary public and without personal knowledge that the facts contained in the documents were correct. This civil law enforcement action also alleged that SunTrust committed widespread errors and abuses in its foreclosure processes.
Broad reform of the mortgage servicing process resulted from the settlement, as well as financial relief for borrowers who are still in their homes through direct loan modification relief, including principal reduction and refinancing for underwater mortgages.