SunTrust Banks said it is cooperating with a federal probe of lawyers’ foreclosure-related expenses that was prompted by a whistleblower lawsuit.
In a filing this week with the U.S. Securities and Exchange Commission, the Atlanta bank disclosed that it hadn’t been able to resolve the matter as part of a nearly $1 billion settlement in June with the U.S. Justice Department over the bank’s alleged improper mortgage lending and foreclosure practices during the financial crisis.
Last month, SunTrust also agreed to pay up to $320 million to settle a criminal investigation by federal authorities that it misled homeowners seeking loan modifications in the wake of the financial crisis.
In the latest probe disclosed this week, SunTrust said the U.S. Attorney General’s Office in New York is conducting a “broader based industry investigation” of law firms’ expenses related to foreclosures of mortgages backed by Fannie Mae, Freddie Mac and the Federal Housing Administration. The probe is tied to a private whistleblower lawsuit that was “filed under seal and remains in the early stages,” according to SunTrust.
The bank said its second-quarter financial statements reflect its current estimate of the “probable losses associated with the matter.”
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