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June 28, 2012

SunTrust Mortgage Will Pay $21 Million to Settle Mortgage Discrimination Lawsuit

SunTrust Mortgage Inc., the mortgage-lending subsidiary of SunTrust Bank, has agreed to pay $21 million to resolve a U.S. Department of Justice lawsuit alleging that the firm overcharged African-American and Hispanic applicants for mortgage loans.
 
The Department of Justice reviewed more than 850,000 residential-mortgage-loan applications that originated from 2005 to 2009 during a 2½-year investigation. 

The government charged that SunTrust Mortgage, which is headquartered in Richmond, Va., violated the Fair Housing Act and Equal Credit Act by charging more than 20,000 African American and Hispanic borrowers higher interest rates than it did non-Hispanic white borrowers in cases where the black and Hispanic loan seekers qualified for lower rates.
SunTrust Mortgage agreed to settle the lawsuit out-of-court.

Specifically, the allegations involve loans made through more than 200 retail offices operated by SunTrust Mortgage in the Southeastern and Mid-Atlantic sections of the United States.

Proceeds from the settlement will be used to compensate victims of SunTrust's mortgage discrimination. The victims live in 34 states and Washington, D.C. SunTrust Bank, the nation's 11th largest commercial bank, is based in Atlanta.

The settlement resulted from work by President Barack Obama's Financial Fraud Enforcement Task Force, which was established to investigate and prosecute financial crimes.

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