(Corrects Fed penalty in para 4 to read $160 million, not $60
Oct 10 SunTrust Banks Inc agreed to pay
nearly $1.2 billion to resolve investigations from several U.S.
authorities into its mortgage practices, the bank said on
SunTrust will pay $468 million in cash and $500 million in
relief to consumers in order to resolve claims from the U.S.
Department of Housing and Urban Development and the U.S.
Department of Justice, the bank said.
The claims relate to certain mortgage loans backed by the
Federal Housing Administration that the bank made between
January 2006 and March 2012, and to problems with its mortgage
The bank entered into a related settlement with the U.S.
Federal Reserve over its mortgage servicing and foreclosure
practices. The regulator assessed a $160 million penalty against
the bank, but deemed it settled by the payments to other
Also on Thursday, the bank announced it agreed to pay Fannie
Mae an additional $228 million to repurchase loans which the
mortgage company had bought but later said did not meet its
The settlements led the bank to take a related charge of
$323 million in the third quarter.
Shares of SunTrust, which is scheduled to report
third-quarter results on Oct. 18 , closed at $33.35 on Thursday
on the New York Stock Exchange.
(Reporting by Aruna Viswanatha in Washington and Aman Shah in
Bangalore; Editing by Saumyadeb Chakrabarty and Andrew Hay)