SunTrust to pay more than $1B in settlements

ATLANTA (AP) - SunTrust Banks Inc. said Thursday that it agreed to cash payments and consumer relief totaling more than $1 billion to settle claims over its handling of government-backed mortgages.

The Atlanta-based banking company said that it agreed to provide $500 million in consumer relief and pay $468 million in cash to settle claims by the Justice Department and the Housing and Urban Development Department. The claims covered FHA-insured mortgages that the bank originated between 2006 and early 2012 and claims under a national settlement program.

SunTrust said it also agreed to a $373 million settlement with Fannie Mae and a $65 million settlement with Freddie Mac over loans funded by the housing-finance agencies between 2000 and 2012. Credits for earlier repurchases will reduce SunTrust's cash payments to about $228 million to Fannie Mae and $40 million to Freddie Mac.

Chairman and CEO William H. Rogers Jr. said the settlements reduced uncertainty and improved the company's risk profile.

The company said it incurred a $323 million charge for the third quarter to cover the items, which will have an after-tax impact on its earnings of $179 million, or 33 cents per share.

SunTrust detailed the payments in a news release and a filing with the Securities and Exchange Commission after the stock market closed.

Its stock fell 83 cents, or 2.5 percent, to $32.52 in extended trading following the announcement. It had ended the regular trading session up $1.08, or 3.4 percent, at $33.35 amid a broad market rally.

(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

Top Stories

  • Bad Idea
    The man behind a staged child abduction apologizes for scaring young kids, parents

  • Oso Clean
    An army of volunteers is making sure mudslide searchers get to put on warm, dry clothes

  • Vacation Time
    Two airlines are battling for your business and you're the winner
ATTENTION COMMENTERS: We've changed our comments, but want to keep you in the conversation.
Please login below with your Facebook, Twitter, Google+ or Disqus account. Existing MyNorthwest account holders will need to create a new Disqus account or use one of the social logins provided below. Thank you.
comments powered by Disqus
Sign up for breaking news e-mail alerts from
In the community
Do you know a student who stands out in the classroom, school and community?
Help make their dreams come true by nominating them for a $1,000 scholarship and a chance to earn a $10,000 Grand Prize. Brought to you by KIRO Radio and Comprehensive Wealth Management.

Do you know an exceptional citizen who has impacted and inspired others?
KIRO Radio and WSECU would like to recognize six oustanding citizens this year. Nominate them to be recognized and to receive a $2,000 charitable grant.