The banks are still paying out large sums of money for their questionable foreclosure practices that caused a foreclosure mess. The fines and payments they are being forced by the courts to pay are to ensure that the large mortgage lending institutions learn their lesson going forward and to continue strengthening the housing industry.
Recently, SunTrust announced that they will pay nearly 1.2 billion in a set of agreements with the government and Fannie Mae over mortgage issues. The principle fine is $468 million, accompanied by $500 million to be used towards consumer relief.
This SunTrust settlement covers many of the same issues covered in last year’s National Mortgage Settlement, in which the five largest mortgage lenders combined paid over $20 billion towards consumer relief. The penalties assessed to the bank were for their unethical use of robo-signing, failure to diligently evaluate foreclosure documents, and for failure to process loan modification paper work.
All of the parties have come to this agreement in hope that it will help to improve the real estate market and economy. The Fed said, they will “closely monitor” SunTrust’s follow-through with their spending on consumer relief.