SunTrust has reached a nearly one billion dollar settlement with the government to resolve allegations it underwrote and provided risky mortgage loans. The Justice Department announced yesterday the 968 million dollar deal with SunTrust Mortgage, a Virginia-based lender and subsidiary of SunTrust Banks. As part of the deal, SunTrust has agreed to provide 500 million dollars in homeowner relief and 418 million to resolve allegations that it underwrote bad loans.
Attorney General Eric Holder said that SunTrust’s conduct is what he called a prime example of the widespread underwriting failures that helped bring about the recent financial crisis. SunTrust Chief Executive William Rogers said in a statement the bank was pleased to have resolved the allegations.