North Carolina residents harmed by mishandled or suspect foreclosures in the aftermath of the financial crisis are set to receive $2 million in cash payments from SunTrust Mortgage as part of a larger $550 million settlement, the state's Attorney General confirmed in a press statement.
North Carolina Attorney General Roy Cooper announced Friday that $23.5 million in financial relief will be distributed to roughly 1,400 North Carolina homeowners who had mortgages serviced by SunTrust and who faced foreclosures during the time period running from Jan. 1, 2008, through Dec. 31, 2013.
As part of the deal with SunTrust, the bank has forgiven $2.8 million in first liens and approximately $2 million in first and second liens to facilitate short-sale transactions for impacted homeowners.
The $2 million payout will provide cash to North Carolina consumers who lost their homes and who alleged misconduct on the part of SunTrust for either unauthorized foreclosures or violations of servicing and foreclosure practices.
The North Carolina settlement is part of a much larger $550 million deal that SunTrust struck with 49 states, the District of Columbia and federal authorities.
“Through these agreements we’re holding banks accountable for past problems and preventing future ones.”
Roy Cooper, North Carolina Attorney General
The deal was made after allegations from attorneys generals surfaced, claiming the bank violated foreclosure, servicing or loan modification practices, harming borrowers who were already in distress and who may have had other relief options available at the time.
“This is welcome relief for North Carolina families who suffered foreclosures done wrong,” said AG Roy Cooper. “Through these agreements we’re holding banks accountable for past problems and preventing future ones.”
Cooper’s office says the AG's settlement with SunTrust is based on the National Mortgage Settlement negotiated back in 2012 with the country’s largest mortgage servicers—Ally/GMAC, Bank of America, JPMorgan Chase, Citi and Wells Fargo.
Cooper previously negotiated a $26-million settlement with Ocwen Financial as part of a larger $2.1 billion deal covering national mortgage servicing issues.