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Lending

SunTrust could face substantial mortgage penalties

DOJ investigates mortgages from 2009 and 2010

gloves fighting

SunTrust Banks (STI) is currently under investigation for mortgage violations and could face substantial penalties, the lender reported in its annual regulatory filing.

Representatives of the United States Attorney's Office for the Western District of Virginia and the Office of the Special Inspector General for the Troubled Asset Relief Program started investigating the lender for mortgages from 2009 and 2010.

According to the filing, “STM harmed borrowers and violated civil or criminal laws by making misrepresentations and failing to properly process applications for modifications of certain mortgages owned by the GSEs pursuant to the HAMP guidelines.”

So far, no determinations have been made, but SunTrust continues to cooperate with the investigation and believes it has a substantially allegations.

In mid-January the bank recorded a significant jump in profit after facing other negative impact of legacy mortgage issues in late 2013.

"We closed the year with 25% core annual earnings growth and substantial efficiency ratio improvement.  Our focus in 2014 will remain on meeting more of our clients' needs, driving profitable growth, and further improving the efficiency of the company," said William Rogers, chairman and CEO of SunTrust Banks.

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