ATLANTA, Oct. 1, 2013 /PRNewswire/ -- SunTrust Banks, Inc. (STI) today announced an agreement under which Freddie Mac agreed to release SunTrust from existing and future loan repurchase obligations for certain breaches of loan-level selling representations and warranties relating to specific populations of single-family loans and certain other obligations.
Jerome Lienhard, CEO of SunTrust Mortgage, said, "We are pleased to enter into this agreement with Freddie Mac as it marks another step in our resolution of legacy mortgage-related matters. We continue to remain focused on providing high quality products and services to our mortgage clients."
Under the agreement, Freddie Mac has released SunTrust from certain existing and future repurchase obligations for loans funded by Freddie Mac between 2000 and 2008, representing approximately 312,000 loans, which is a broader population of loans than considered in SunTrust's existing mortgage repurchase reserve. The agreement also compensates Freddie Mac for certain outstanding and potential future losses relating to denials, rescissions and cancellations of mortgage insurance. The $65 million settlement agreement was adjusted for $25 million of credits related to certain prior repurchases, resulting in a one-time cash payment to Freddie Mac of $40 million. While the majority of the settlement agreement is covered by SunTrust's existing reserves for mortgage repurchases, SunTrust expects to incur an approximate $15 million incremental mortgage provision expense in the third quarter of 2013 related to this settlement agreement.
About SunTrust Banks, Inc.
SunTrust Banks, Inc., headquartered in Atlanta, is one of the nation's largest banking organizations, serving a broad range of consumer, commercial, corporate and institutional clients. As of June 30, 2013, SunTrust had total assets of $171.5 billion and total deposits of $127.6 billion. Through its flagship subsidiary, SunTrust Bank, the Company operates an extensive branch and ATM network throughout the high-growth Southeast and Mid-Atlantic states and a full array of technology-based, 24-hour delivery channels. The Company also serves clients in selected markets nationally. Its primary businesses include deposit, credit, trust and investment services. Through its various subsidiaries, the Company provides mortgage banking, asset management, securities brokerage, and capital market services. SunTrust's Internet address is suntrust.com.
- Financials Industry
- Freddie Mac