WASHINGTON -- The government on Tuesday announced a nearly $1 billion settlement with SunTrust to resolve allegations that it underwrote and provided faulty mortgage loans.
In reaching a $968 million deal, the Justice Department and government regulators accused SunTrust of giving borrowers false and misleading information and charging unauthorized fees.
"SunTrust’s conduct is a prime example of the widespread underwriting failures that helped bring about the financial crisis" of 2008, Attorney General Eric Holder said in a statement.
The agreement is with SunTrust Mortgage, a Richmond, Virginia-based mortgage lender and subsidiary of SunTrust Banks Inc. The financial institution had announced the anticipated settlement in October.
As part of the deal, SunTrust has agreed to provide $500 million in homeowner relief and $418 million to resolve allegations that it underwrote bad loans.
SunTrust chief executive William H. Rogers Jr. said in a statement that SunTrust was pleased to have resolved the allegations. He said the company has made improvements to its mortgage underwriting processes and internal controls.