SunTrust Mortgage Settles Bias Lawsuit

Posted by Orb Staff on June 01, 2012 No Comments
Categories : Residential Mortgage

Richmond, Va.-based SunTrust Mortgage Inc. has agreed to pay $21 million to resolve a lawsuit alleging that the company engaged in a pattern or practice of discrimination that increased loan prices for many of the qualified African-American and Hispanic borrowers who obtained loans between 2005 and 2009 through SunTrust Mortgage's regional retail offices and national network of mortgage brokers.

The settlement also requires SunTrust Mortgage to continue using policies and practices it adopted to prevent discrimination following the time period at issue in the lawsuit.

The settlement, which is subject to court approval, comes after a two-and-a-half-year investigation by the U.S. Department of Justice, which included reviewing internal company documents and data on more than 850,000 residential mortgage loans SunTrust Mortgage originated between 2005 and 2009. SunTrust Mortgage was alleged to have violated the Fair Housing Act and Equal Credit Opportunity Act by charging more than 20,000 African-American and Hispanic borrowers higher fees and interest rates than non-Hispanic white borrowers, not based on borrower risk, but because of their race or national origin.Â

‘Racial and ethnic bias have no place in the lending market,’ said Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia. ‘We are pleased that SunTrust Mortgage is taking steps to compensate the victims and to ensure fair and equal access to credit in the future.’

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