Also see: "WAS THE SUNTRUST AGENCY 'SHORTCUT' THE BIGGEST FRAUD IN MORTGAGE HISTORY?"
None of the major news outlets that reported on the Justice Department’s agreement with SunTrust last week mentioned the fact that it was resolved with a non prosecution agreement.
The Justice Department’s press release didn’t mention it.
The Associated Press story, which ran in the Washington Post and other papers, didn’t mention the word criminal or prosecution or non prosecution.
The Wall Street Journal story reported that
Nothing about the non prosecution agreement.
The New York Times reported that
Again, nothing about the non prosecution agreement.
SunTrust was represented by Richard Cullen of McGuireWoods in Richmond, Virginia.
When the Justice Department sent out the press release to reporters, it attached four documents — a statement of facts, a victim compensation and restitution plan, a remedial action plan, and what the government called a “restitution and remediation agreement.”
On page five of that “restitution and remediation agreement” is the agreement by the government not to criminally prosecute SunTrust.
The Office of Special Inspector General for the Troubled Assets Relief Program (SIGTARP) had no qualms about putting the non prosecution agreement in the headline.
The SIGTARP press release was almost identical to the Justice Department press release.
Except for the title and the opening paragraph.
The SIGTARP press release was titled — $320 Million Non Prosecution Agreement Reached with TARP Recipient SunTrust Bank.
The Justice Department press release was titled – SunTrust Mortgage Agrees to $320 Million Settlement.
The first paragraph of the SIGTARP press release makes it clear that the issue was resolved with a non prosecution agreement.
The first paragraph of the Justice Department press release says nothing about the non prosecution agreement.
And from the facts laid out by SIGTARP, it’s an open question as to why SunTrust got the benefits of a non prosecution agreement — instead of some tougher alternative, like a deferred prosecution or even a full out criminal prosecution.
Federal officials alleged that SunTrust misled numerous mortgage servicing customers who sought mortgage relief through the Home Affordable Modification Program (HAMP).
SunTrust made material misrepresentations and omissions to borrowers in HAMP solicitations and failed to process HAMP applications in a timely fashion.
As a result of SunTrust’s mismanagement of HAMP, thousands of homeowners who applied for a HAMP modification with SunTrust suffered serious financial harms.
SunTrust will pay a total of $320 million to resolve the criminal investigation into its HAMP program.
SunTrust will pay $179 million in restitution to compensate borrowers for damage caused by its mismanagement of HAMP. That money will be distributed to borrowers in eight pre-determined categories of harm. If more than $179 million is needed, the bank will also guarantee an additional $95 million for additional restitution. SunTrust will also pay $10 million in restitution directly to Fannie Mae and Freddie Mac.
SunTrust will pay $16 million in forfeiture. This money will be available to law enforcement agencies working on mortgage fraud and other matters related to the misuse of TARP funds.
SunTrust will pay $20 million to establish a fund for distribution to organizations providing counseling and other services to distressed homeowners. SunTrust will pay this amount to a grant administrator selected by the government, which funds will in turn be awarded to housing counseling agencies and other non-profits devoted to consumer counseling and advocacy.
SunTrust will also implement certain remedial measures aimed at preventing future problems like those that led to this investigation. SunTrust has agreed to increase loss mitigation staff, monitor its mortgage modification process, and provide semi-annual reports regarding compliance with the agreement.