Consumer complaint received 2018-06-13
Company: SUNTRUST BANKS, INC.
State: FL
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Trouble during payment process

Complaint:
CFPB Complaint XX/XX/XXXX Subject : SunTrust Bank wrongful holding of Mortgagee insurance proceeds. 

Facts : 1. XXXX XXXX approved a Hurricane Irma damage claim in the amount of {$80000.00} +/- for a replacement of the total roof and issued an initial insurance check in the amount of {$52000.00} made payable to home owner and SunTrust. SunTrust has a copy of XXXX documents. 

2. Check was signed by homeowner and delivered to SunTrust on XX/XX/XXXX 3. SunTrust advised Mortgagee to comply with SunTrust Claim-check procedure which mortgagee did in full on XX/XX/XXXX. 

4. SunTrust advised that eventually Mortgagee would receive {$40000.00} of the {$52000.00} sometime and the balance in two equal installments. One when 50 % of work is complete and one when SunTrust determines the work to be complete. This is in addition to a {$12000.00} holdback held by the insurance company which petitioner accepts and believes is fair and reasonable. 

5. There is no need for SunTrust to hold any of the money or require Mortgagee to waste time and money completing the unnecessary Claim-check process. There is no risk to the bank as the balance of the mortgage is less than 35 % of the value of the house. This was documented in the attached XX/XX/XXXX letter to SunTrust CEO XXXX XXXX ( Exhibit A ). This letter received by SunTrust via email on XX/XX/XXXX ( Exhibit B ) and a few days later by XXXX. No response from SunTrust CEO. The letter detailed the wrongful nature of the money grab and demanded immediate release of the full amount of the insurance proceeds. 

6. A second letter ( Exhibit C ) was dated, sent and received by SunTrust on XX/XX/XXXX pointing out the harm to Mortgagee in having to use retirement assets to pay the {$25000.00} initial payment to the roofing contractor in connection with the roof contract executed on XX/XX/XXXX.This letter also pointed out that this wrongful holding of Mortgagee money may very well violate the SunTrust Code of Business Conduct and Ethics which may be of interest to other oversight agencies of the US Government . 

7. Mortgagee is advised that SunTrust will not pay interest on Mortgagee money it is wrongfully holding. 

8. A third letter ( Exhibit D ) critical of SunTrust CEO Non response and bank partial response was sent to SunTrust on XX/XX/XXXX. This  letter again demanded immediate full payment with interest. 

9. There is no rational or logical reason for SunTrust to wrongfully hold money due Mortgagee. There is absolutely no mortgagee risk to SunTrust. While there is language in the mortgage that seems to give SunTrust the power to hold Mortgagees money that is obviously a Contract of Adhesion and not enforceable in law. 
 10. In addition to processing this complaint I would like CFPB to investigate if this is a scam to force people without additional capital into high interest rate loans while holding their insurance and not paying interest..

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation