Consumer complaint received 2019-03-12
Company: SUNTRUST BANKS, INC.
State: NC
Product: Mortgage
Sub-product: Other type of mortgage
Issue: Trouble during payment process

Complaint:
Contract of Insurance / Notice of Error - Please find this electronic copy with the hard copy via USPS delivery : XX/XX/XXXX CERTIFIED MAIL RETURN RECEPT SunTrust Bank Attention : Client Services Department XXXX XXXX XXXX XXXX, VA XXXX Re : Notice of Error / Contract of Insurance Please accept this Formal Notice ensuing from SunTrust Mortgage , Inc. decision to replace the Original Modification, and issue the Contract of Insurance recorded upon the XXXX XXXX County Public Registry more particularly referenced Exhibit, in Book XXXX, Page XXXX. 

On or about XX/XX/XXXX upon returning home a XXXX overnight envelope was found at the doorstep of the home of XXXX XXXX XXXX and XXXX XXXX, ( XXXX XXXX ), XXXX XXXX XXXX, from SunTrust Mortgage , Inc. ( SunTrust ). 

Within the envelope was an unsolicited Contract of Insurance as that term is defined by N.C.G.S 58-1-10 whereas, providing indemnity against loss from the replacement of the Original Modification. 


N.C.G.S. 58-1-10. Contract of Insurance A contract of insurance is an agreement by which the insurer is bound to pay money or its equivalent or to do some act of value to the insured upon, and as an indemnity or reimbursement for the destruction, loss or injury of something in which the other party has an interest. 


Here, SunTrust seemingly provided a Contract of Insurance with the intention to mitigate the fact it, oversold beneficiary interest ( s ) in real properties, commonly known as XXXX XXXX XXXX XXXX and XXXX XXXX XXXX to competing Holders. 

SunTrust remains in possession of appraisals relating to the said properties in the sum of {>= $1,000,000} and XXXX respectively. 

SunTrust created multiple Notes among third parties, against real property securing the original modification. SunTrust failed to disclose this to the owner-occupant ( s ), resulting in competing liens against the said real property and equitable holdings. 

Exhibit B, SunTrust Contract of Insurance, as read ; In consideration of Lender Modifying the original terms of the loan and regardless of the reason for any loss, misplacement, omission, misstatement or inaccuracy in any Loan documentation, Borrower agrees as follows : If any document is lost, misplaced, omitted, misstated or inaccurately reflects the true and correct terms and conditions of the Modification, upon request of the Lender ( including and assignee of Lender, Borrower will comply with Lenders request to execute, acknowledge, initial and or deliver to Lender any documentation deemed necessary to replace and/or correct the lost, misplaced, omitted, misstated or inaccurate document ( s ). 

It goes on to state : If the original Modification is replaced, Lender hereby indemnifies Borrower against any loss associated with a demand on the original Modification. 

Previously, counsel to the XXXX XXXX Commissioner of Insurance wrote and advised that, as long as the arrangement is between a lender and its borrower and does not include an element of indemnification, then the arrangement is not a contract of insurance under N.C. Gen. Stat. 58-1-10. 

SunTrust Mortgage. Inc., drafted, delivered, recorded and published upon the official record of the XXXX XXXX County Register of Deeds in Book XXXX Page XXXX the subject Contract of Insurance. 

For these reasons in part, SunTrust has the express obligation to indemnify the owner ( s ) of XXXX XXXX XXXX collectively ( SunTrust Insureds ) given SunTrust default and failure to pay sums owned to its Funder under the Note. 

Please accept this as notice to indemnify the owner ( s ) of XXXX XXXX XXXX from incurred loss ( s ) due to SunTrust default. 

In addition to this Notice of Error for failure to Indemnify, please provide : 1 ) Copies of, Insurance License ( s ) in the name of SunTrust Mortgage , Inc. a Foreign Company for years XXXX through XXXX issued by the XXXX XXXX Department of Insurance, affording the right to solicit consumers and underwrite insurance indemnity contracts. 


Sincerely, XXXX XXXX XXXX

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