SunTrust Banks settles its foreclosure debacle in Georgia
The housing crisis may be over, but the federal government and the state of Georgia are still working to clean up the mess. SunTrust Banks, which is based in Atlanta, is the latest in a line of financial institutions to settle with government entities regarding deficient mortgage and foreclosure practices. The nearly $1 billion settlement could provide some relief for homeowners in the state.
The settlement will be administered over the course of three years. As part of the settlement, any homeowners whose home was foreclosed on by SunTrust from January 1, 2008 through December 31, 2013 will be hearing from the bank regarding the receipt of a portion of the $40 million set aside for them. This includes some 9,800 people.
Georgia borrowers who are still at risk of losing their homes may be eligible for some form of relief — such as principal reductions or loan modifications — from the bank in accordance with the settlement. There will be certain criteria to meet, but the bank does have to meet certain standards and numbers under the agreement. Foreclosure actions are to be a last resort.
This may be good news for thousands of homeowners in Georgia, but it will not help everyone. Some borrowers continue to face the prospect of foreclosure and do not qualify for any type of relief. Those homeowners could file for bankruptcy, which could give them the opportunity to keep their homes. Many families who are unable to make their mortgage payments also struggle with other debts, so filing for bankruptcy could provide an avenue to deal with all of their debts, which could lead to a fresh start financially.
Source: savannahnow.com, “Georgia reaches $550 million settlement with SunTrust over faulty mortgages”, Julia Ritchey, June 18, 2014