Case 3:12-cv-00397-REP Document 1 Filed 05/31/12 Page 1 of 29 PagelD# 1

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UNITED STATES DISTRICT COURT EASTERN DISTRICT OF VIRGINIA
RICHMOND DIVISION

UNITED STATES OF AMERICA, Plaintiff,

v. SUNTRUST MORTGAGE, INC., Defendant.

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COMPLAINT The United States of America alleges:
INTRODUCTION 1. The United States brings this action against SunTrust Mortgage, Inc. for discriminating against more than 20,000 African-American and Hispanic borrowers in its residential mortgage lending. The action to enforce the Fair Housing Act, 42 U.S.C. §§ 3601 3619 (FHA), and the Equal Credit Opportunity Act, 15 U.S.C. §§ 1691-1691f (ECOA), is brought to redress the discrimination based on race and national origin that SunTrust Mortgage engaged in from 2005 to 2009. 2. From 2005 to 2009, SunTrust Mortgage annually originated between 120,000 and 200,000 mortgage loans with an annual principal value o f more than $30 billion through its retail loan officers and its wholesale channels using mortgage brokers, making it one o f the nation’s twenty largest mortgage lenders in each o f those years. Throughout that period, SunTrust Mortgage offered nearly every type o f mortgage loan product available in the market, and it generally concentrated on conforming prime loans.

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3. As a result o f SunTrust Mortgage’s policies and practices, more than 20,000 AfricanAmerican and Hispanic borrowers paid SunTrust Mortgage higher loan fees and costs for their home mortgages than non-Hispanic White borrowers, not based on their creditworthiness or other objective criteria related to borrower risk, but because o f their race or national origin.
4. SunTrust Mortgage s discrimination increased loan prices for many of the AfricanAmerican borrowers who obtained loans between 2005 and 2008 through offices directly operated by SunTrust Mortgage in Southeastern and Mid-Atlantic states and the District of Columbia. SunTrust Mortgage’s discrimination also increased loan prices for many o f the African-American and Hispanic borrowers located across the United States who obtained loans between 2005 and 2009 through SunTrust Mortgage’s national network of mortgage brokers.
5. The victims of SunTrust Mortgage’s discrimination were located in more than 75 geographic markets spread across the country. For example, the statistical analyses discussed below found the ten metropolitan markets with the most victims were located throughout the country: Atlanta; Washington, DC; Miami; Los Angeles; Orlando; Virginia Beach; Riverside; Richmond, Virginia; Phoenix; and San Francisco-Oakland. Nearly 60% of the victims of SunTrust Mortgage’s discrimination are African-American.
6. While it knew about discriminatory prices, SunTrust Mortgage maintained compensation systems that promoted such discrimination by sharing discriminatory charges with any retail mortgage loan officer or wholesale mortgage brokers who could obtain inflated prices from African-American and Hispanic borrowers.

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7. The higher borrowing costs SunTrust Mortgage charged to African-American and Hispanic families - whether paid as higher up-front fees or higher interest rates - put increased economic burdens on those families.
8. The United States brings this lawsuit to hold SunTrust Mortgage accountable for its serious violations of law and remedy the substantial and widespread harmful consequences of SunTrust Mortgage’s discriminatory lending policies and practices.
9. This Court has jurisdiction over this action pursuant to 28 U.S.C. § 1345,42 U.S.C. § 3614, and 15 U.S.C. § 1691e(h). Venue is appropriate pursuant to 28 U.S.C. § 1391.
DEFENDANT 10. SunTrust Mortgage Inc., a Virginia corporation, is a wholly-owned subsidiary of SunTrust Bank, a bank chartered by the Georgia Department of Banking and Finance and a member of the Federal Reserve System. SunTrust Bank is the nation’s eleventh-largest commercial bank, and it is a wholly-owned subsidiary of SunTrust Bank, Inc. SunTrust Mortgage’s principle place o f business is 901 Semmes Avenue, Richmond, Virginia. During the period of time relevant to the events at issue in this Complaint, SunTrust Mortgage was subject to the regulatory authority o f the Board o f Governors of the Federal Reserve System. 11. SunTrust Mortgage is subject to Federal laws prohibiting lending discrimination, including the FHA and the ECOA and the regulations promulgated under each o f those laws. The FHA and the ECOA prohibit lenders from discriminating on the basis of, inter alia, race or national origin in their lending practices. Charging higher prices for loans on the basis o f race or national origin, including charging higher discretionary fees at the time o f origination and

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charging higher rates o f interest, is a discriminatory lending practice prohibited by the FHA and the ECOA.
12. SunTrust Mortgage is a “creditor” within the meaning o f the ECOA, 15 U.S.C. § 1691a(e), and it engages in “residential real estate-related transactions” within the meaning of the FHA, 42 U.S.C. § 3605. SunTrust Mortgage also is subject to the Home Mortgage Disclosure Act (HMDA), 12 U.S.C. § 2803, which requires mortgage lenders to collect and maintain data on the race and national origin of each applicant for a home loan.
REFERRAL FROM BANK REGULATORY AGENCY 13. Beginning in 2007, Federal Reserve System Examiners conducted a review of the lending practices o f SunTrust Mortgage to evaluate compliance with the FHA and the ECOA. As a result o f that review, the Federal Reserve Board determined that it had “reason to believe that SunTrust Mortgage Incorporated engaged in a pattern or practice o f mortgage pricing discrimination based on race . . . and national origin in violation o f .. . the Equal Credit Opportunity Act and the Fair Housing Act.” 14. Following its determination described in the previous Paragraph, and pursuant to 15 U.S.C. § 1691e(g), the Federal Reserve Board referred the matter the United States Department o f Justice on December 3, 2009. Through a series of tolling agreements, SunTrust Mortgage agreed to a suspension of the running o f any applicable statute of limitation from December 28, 2009 through May 31, 2012 for “any cause o f action or related claim or remedy, arising from the issues referred” by the Federal Reserve Board. 15. Based on the Federal Reserve Board referral, the Department o f Justice has engaged since 2010 in an investigation o f SunTrust Mortgage’s lending policies, practices, and

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procedures, including reviewing internal company documents and non-public loan-level data on more than 850,000 residential mortgage loans SunTrust Mortgage originated between 2005 and 2009.
FACTUAL ALLEGATIONS 16. Beginning prior to January 2005 and continuing through December 2009, SunTrust Mortgage originated residential mortgage loans through both a retail channel, with roughly 200 offices m more than a dozen states in Southeastern and Mid-Atlantic states, and a wholesale channel, with a network of mortgage brokers located across the United States. SunTrust Mortgage located its retail offices in markets where SunTrust Bank operates, and immediately adjacent states, and it obtained customers through referrals from SunTrust Bank branches.
Retail Lending Pricing 17. Between 2005 and 2008, SunTrust Mortgage charged African-American borrowers higher fees and costs than non-Hispanic White retail borrowers not based on their creditworthiness or other objective criteria related to borrower risk, but because o f their race. It was SunTrust Mortgage’s business practice to allow its employees who originated loans through its retail channel to vaiy a loan’s interest rate and other fees from the price initially set based on a borrower’s objective credit-related factors. This subjective and unguided pricing discretion resulted in African-American borrowers paying more not based on borrower risk than nonHispanic White borrowers both on a nationwide basis and in dozens of geographic markets in Southeastern and Mid-Atlantic states where SunTrust Mortgage originated a large volume of loans. As a result o f SunTrust Mortgage’s discriminatory retail pricing practices, an African-

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American borrower paid, on average, hundreds of dollars more for a SunTrust Mortgage retail loan.

18. SunTrust Mortgage’s retail pricing monitoring efforts, while inadequate to remedy discriminatory practices against African-American borrowers between 2005 and 2008, were sufficient to put it on notice of widespread pricing disparities based on race. Even when SunTrust Mortgage had reason to know there were disparities, however, SunTrust Mortgage did not act to determine the full scope o f these retail pricing disparities, nor did it take prompt and effective action to eliminate these disparities.

19. Before January 2005 and continuing through December 2008, SunTrust Mortgage set prices, including the interest rate and points, on a daily basis for its various retail mortgage loan products based on the current market rates o f interest and the price it would receive by selling loans to investors, plus a profit margin for SunTrust Mortgage. These prices were communicated through rate sheets, ’ which were available to its retail mortgage loan officers and other retail lending employees.

20.

During that period, SunTrust Mortgage also issued on a frequent basis, typically at

least once per month, “Retail Program Pricing Adjustments” worksheets that dictated the

adjustments that would be made to the price on the rate sheet based on numerous objective credit

characteristics of applicants. For instance, the Retail Program Pricing Adjustment worksheet

issued on July 1, 2008 specified that borrowers receiving a conforming fixed rate mortgage loan

who had less than 30% equity in their home had to pay a higher price when they had a FICO

credit score below 720, and borrowers receiving such a loan had to pay an even higher price

when they had a FICO credit score below 680. That same worksheet specified that borrowers

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receiving a conforming fixed rate mortgage loan who had more than 40% equity in their home had to pay a lower price than borrowers with less equity, regardless of credit score. These pricing adjustments were intended to fully compensate SunTrust Mortgage and the investors who bought its mortgage loans for borrowers’ differences in credit risk.
21. By consulting the rate sheets in conjunction with the Retail Program Pricing Adjustments worksheets, or computer systems that relied on the data contained in those two sources, SunTrust Mortgage retail mortgage loan officers determined the interest rate, fees, and points to quote individual mortgage loan applicants based on their objective credit characteristics. Individual mortgage loan applicants did not have access to the rate sheets or Retail Program Pricing Adjustment worksheets, and could not apply for a retail mortgage loan from SunTrust Mortgage except at the price quoted by their mortgage loan officer.
22. Before January 2005 and continuing through December 2008, SunTrust Mortgage gave its retail mortgage loan officers, and other employees who participated in the loan origination process, discretion to deviate upward or downward from the loan price that was set based on the borrower’s objective credit characteristics using the rate sheets and Retail Program Pricing Adjustment worksheets. This discretion was granted through formal SunTrust Mortgage policies, including the “Premium/Subsidy Policy” and the “Retail Discretionary Pricing Management Policy”.
23. SunTrust Mortgage retail mortgage loan officers could exercise discretion to deviate from the loan price that was set based on the borrower’s objective credit characteristics using the rate sheets and Retail Program Pricing Adjustment worksheets in three ways: by altering the

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interest rate, by altering the origination fee, and by altering the standard allocation o f closing costs between the borrower and SunTrust Mortgage.
24. SunTrust Mortgage regularly calculated a “net overage” for each retail mortgage loan. The net overage approximates the amount, positive or negative, by which the total cost o f a mortgage loan to a borrower differs from the total cost to the borrower o f that loan had it closed at the price set by the rate sheet and Retail Program Pricing Adjustment worksheets based on the borrower’s objective credit characteristics. A positive net overage raises the total cost of mortgage loans to borrowers above what they would pay if the loans were closed based on the prices that were set based on the borrower’s objective credit characteristics. A negative net overage - which SunTrust Mortgage called an “underage” - lowers the total cost o f mortgage loans to borrowers below what they would pay if the loans were closed based on the prices that were set based on the borrower’s objective credit characteristics.
25. Retail mortgage loan officers’ compensation varied based on these discretionary pricing adjustments. Loan officers were paid based on their volume o f mortgage loans plus a share of SunTrust Mortgage’s profit produced by pricing deviations. The compensation system allowed loan officers to receive extra compensation for making loans with overages or small underages, and increased compensation for a greater overage or a smaller underage.
26. Since at least 2001, SunTrust Mortgage’s internal policies recognized that discrimination could result from allowing its mortgage loan officers to engage in discretionary pricing adjustments.
27. SunTrust Mortgage continued to allow mortgage loan officers to charge overages and raise their compensation through discretionary pricing until April 2010.

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28. Between at least January 2005 and December 2008, SunTrust Mortgage did not establish objective criteria, or provide guidelines, instructions, or procedures to its retail mortgage loan officers, for setting overages or underages. Instead, it granted individual retail mortgage loan officers, and other individual employees, discretion to subjectively set overages and underages within broad parameters limited only by a policy that purported to cap overages at 100 basis points before August 1, 2008 and 50 basis points starting August 1,2008, and a requirement that underages o f more than 100 basis points be approved by a manager. A basis point is a percentage o f the total amount of a loan, with one hundred basis points equaling one percent of the loan amount. Before April 2007, SunTrust Mortgage did not centrally monitor adherence to these limits.
29. The majority of SunTrust Mortgage’s retail borrowers received underages between 2005 and 2008 because the high profit margin built into SunTrust Mortgage’s rate sheets made its rates uncompetitive with other lenders. Consequently, among all borrowers, the average net overage charged each year during that period was negative.
30. Charging a higher net overage on the basis o f race, whether through SunTrust Mortgage’s inclusion of a greater overage or a smaller underage in the price of the mortgage loan, is a discriminatory lending practice by SunTrust Mortgage prohibited by the FHA and the ECOA.
31. For each retail mortgage loan that SunTrust Mortgage originated, information about each borrower’s race and the amount o f overage or underage paid was available to, and was known by, SunTrust Mortgage. SunTrust Mortgage was required to collect, maintain, and report

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data with respect to significant mortgage loan terms and borrower information for residential loans, including the race o f each retail home loan borrower, pursuant to HMDA.
32. SunTrust Mortgage regularly monitored between 2005 and 2008 the racial disparities that existed in the net overage it charged on mortgage loans, and it knew racial disparities in net overage existed throughout that period on the national level and in multiple regional markets.
33. Statistical analyses of retail mortgage loans originated by SunTrust Mortgage between January 2005 and December 2008 demonstrate statistically significant discriminatory pricing disparities in retail mortgage loans based on race. Statistical significance is a measure o f probability that an observed outcome would not have occurred by chance. As used in this Complaint, an outcome is statistically significant if the probability that it could have occurred by chance is less than 5%.
34. Measured on a nationwide basis by net overage, in each year between 2005 and 2008, SunTrust Mortgage charged African-American borrowers whom SunTrust Mortgage determined had the credit characteristics to qualify for a home mortgage loan more in pricing adjustments not based on borrower risk for retail loans than non-Hispanic White borrowers. The annual net overage disparities ranged between approximately 19 and 26 basis points, and they are statistically significant.
35. In approximately 63% o f high loan-volume markets in 2005 (17 of 27), defined for purposes of this paragraph as those metropolitan statistical areas (“MSAs”) and non-MSA areas in each state where SunTrust Mortgage made more than 100 total retail mortgage loans and 30 or more retail mortgage loans to African-American borrowers in a given year, SunTrust Mortgage charged African-American borrowers more in pricing adjustments not based on borrower risk for

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retail loans, as measured by net overage, than non-Hispanic White borrowers by a statistically significantly amount. In 2006, approximately 58% of such markets (20 of 34); in 2007, approximately 54% of such markets (19 of 35); and in 2008, approximately 52% o f such markets (14 of 27) showed statistically significant net overage disparities disfavoring African-American retail borrowers. The disparities in pricing adjustments not based on borrower risk resulted in African-American borrowers in these markets paying between approximately 12 and 80 basis points more than non-Hispanic White borrowers for retail loans in a given year. In 2005 and 2006, there were no high loan-volume markets in which SunTrust Mortgage charged nonHispanic White borrowers statistically significantly higher net overage for retail loans than African-American borrowers in a given year; in 2007 and 2008, the number of such markets in a given year ranged only between 1 and 2, or 4% to 6% of the high loan-volume markets.1
36. These net overage disparities mean, for example, that SunTrust Mortgage in 2007 charged a retail customer in Atlanta borrowing $200,000 an average o f about $745 more in pricing adjustment not based on borrower risk if he were African-American, than the average amount charged to a non-Hispanic White borrower. In 2008, SunTrust Mortgage charged African-American retail customers in Washington, D.C. borrowing $200,000 approximately $630 more than the average amount SunTrust Mortgage charged in pricing adjustments not based on borrower risk to a non-Hispanic White borrower.
37. In setting the terms and conditions for its retail mortgage loans, including interest rates, points, and fees, SunTrust Mortgage accounted for individual borrowers’ differences in
1The inclusion throughout this Complaint o f statistical analyses for high loan-volume markets is intended only to provide examples o f SunTrust Mortgage’s violation of lending discrimination laws. The United States’ allegations that SunTrust Mortgage violated lending discrimination laws are not limited to these high loan-volume markets.
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credit risk characteristics by setting the prices shown on its rate sheets and Retail Program Pricing Adjustments worksheets for each loan product to include its assessment of applicant creditworthiness as explained in Paragraphs 19-21. SunTrust Mortgage’s loan officers’ pricing adjustments, as measured by net overage, were separate from and not controlled by the credit risk adjustments already reflected in the rate sheets and Retail Program Pricing Adjustments worksheets. Accordingly, the racial net overage disparities described in Paragraphs 34-35 are not adjusted for borrowers’ credit risk characteristics.
38. Regression analyses o f SunTrust Mortgage retail pricing that control for creditrelated factors such as credit score, loan amount, loan to value ratio, loan purpose, and others, also demonstrate that the racial disparities in pricing adjustments described in Paragraphs 34-35 produced racial disparities in the annual percentage rate o f interest charged by SunTrust Mortgage between 2005 and 2008 to African-American retail borrowers that cannot be explained by credit risk factors. Thus, accounting for borrower credit risk factors does not explain the racial disparities, even if those factors were relevant to the subjective pricing adjustments measured by net overage.
39. The statistically significant racial disparities in net overage described in Paragraphs 34-35 for African-American retail borrowers who SunTrust Mortgage determined had the credit characteristics to qualify for a home mortgage loan resulted from the implementation and interaction o f SunTrust Mortgage’s policies and practices that: (a) allowed subjective and unguided pricing adjustments not based on borrower risk by its own employees, including retail mortgage loan officers, in setting overages and underages and then including those overages and underages in the terms and conditions o f loans SunTrust Mortgage origination; (b) did not

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require its employees to justify or document the reasons for many of the pricing adjustments not based on borrower risk; (c) failed to adequately monitor for and fully remedy the effect of racial disparities in those pricing adjustments; and (d) linked loan officer compensation in part to the charging of overages and underages. Net overage specifically measures the pricing variation caused by the subjective and unguided pricing adjustments not based on borrower risk. SunTrust Mortgage continued to use this non-risk-based component o f its overall retail loan pricing policy, to inadequately document and review the implementation of that pricing component, and to link loan officer compensation to overages and underages through at least the end o f 2008.
40. SunTrust Mortgage’s policies and practices identified in the previous Paragraph were not justified by business necessity or legitimate business interests. There were less discriminatory alternatives available to SunTrust Mortgage than these policies or practices. SunTrust Mortgage was able to substantially reduce its racial pricing disparities, yet continue as a leading national retail mortgage loan originator, in 2009 and later years after it altered the policies and practices identified in the previous Paragraph by limiting its employees’ ability to make pricing adjustments not based on borrower risk and eliminating the compensation incentives to make such adjustments.
41. SunTrust Mortgage had knowledge that the subjective and unguided discretion it granted to mortgage loan officers in its retail mortgage loan pricing policies and practices was being exercised in a manner that discriminated against African-American borrowers, but it continued to implement its policies and practices with that knowledge. SunTrust Mortgage did not take effective action before the end o f 2008 to change the pricing adjustment policies or practices to fully eliminate their discriminatory impact, nor did it change its compensation policy

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to discourage the charging o f overages or small underages. It did not act before the end of 2008 to identify or compensate the individual borrowers who were victims o f its discriminatory retail mortgage loan pricing policies or practices.
Wholesale Lending Pricing 42. Between 2005 and 2009, SunTrust Mortgage charged African-American and Hispanic borrowers higher fees and costs than non-Hispanic White wholesale borrowers not based on their creditworthiness or other objective criteria related to borrower risk, but because of their race or national origin. It was SunTrust Mortgage’s business practice to allow mortgage brokers who generated loan applications through its wholesale channel to vary a loan’s interest rate and other fees from the price initially set based on a borrower’s objective credit-related factors. This subjective and unguided pricing discretion resulted in African-American and Hispanic borrowers paying more not based on borrower risk than non-Hispanic White borrowers both on a nationwide basis and in dozens o f geographic markets across the country where SunTrust Mortgage originated a large volume of wholesale loans. As a result of SunTrust Mortgage’s discriminatory wholesale pricing practices, an African-American or Hispanic borrower paid, on average, hundreds of dollars more for a SunTrust Mortgage wholesale loan. 43. SunTrust Mortgage’s wholesale pricing monitoring efforts, while inadequate to remedy discriminatory practices against African-American and Hispanic borrowers between 2005 and 2009, were sufficient to put it on notice of widespread pricing disparities based on race and national origin. Even when SunTrust Mortgage had reason to know there were disparities, however, SunTrust Mortgage did not act to determine the full scope o f these wholesale pricing disparities, nor did it take prompt and effective action to eliminate those disparities.

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44.' Prior to January 2005 and continuing at least until December 2009, SunTrust Mortgage originated and funded residential mortgage loans through a wholesale channel. Applications for these loans were brought to SunTrust Mortgage by several thousand mortgage brokers throughout the United States who had entered into contracts with SunTrust Mortgage for the purpose of bringing mortgage loan applications to it for origination and funding.
45. SunTrust Mortgage’s relationship with the mortgage brokers who brought mortgage loans to it was governed throughout the time period at issue by its standard Mortgage Broker Agreement. The Mortgage Broker Agreement from 2005 through 2009 consistently contained extensive provisions detailing that SunTrust Mortgage maintained ultimate control over all lending decisions, including pricing terms and conditions, for mortgage loans made through its wholesale channel. SunTrust Mortgage was directly and extensively involved in setting the complete terms and conditions o f wholesale mortgage loans.
46. SunTrust Mortgage evaluated the risk o f making each wholesale mortgage loan using SunTrust Mortgage’s underwriting guidelines and determined whether to originate and fund the loan. The Mortgage Broker Agreement provided that SunTrust Mortgage would “make a decision on the [loan] Application in its sole discretion.” The Mortgage Broker Agreement also provided that each mortgage loan approved by SunTrust Mortgage for funding would be closed in the name of SunTrust Mortgage.
47. Before January 2005 and continuing through December 2009, SunTrust Mortgage set prices, including the interest rate and points, on a daily basis for its various wholesale home mortgage loan products based on the current market rates o f interest and the price it would

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receive by selling loans to investors, plus a profit margin for SunTrust Mortgage. These prices were communicated to its mortgage brokers through “rate sheets.”

48.

During that period, SunTrust Mortgage also issued on a frequent basis, typically at

least once per month, pricing adjustment worksheets for the broker channel that dictated the

adjustments that would be made to the price on the rate sheet based on numerous objective credit

characteristics o f applicants. For instance, the pricing adjustment worksheet issued on January

23, 2009 specified that borrowers receiving a conforming fixed rate mortgage loan who had

between 20% and 25% equity in their home had to pay a higher price for every 20 points their

FICO credit score fell below 740. That same worksheet specified that conforming fixed rate

borrowers o f all credit scores had to pay a higher price when they wanted to cash out equity from

their home as part of a refinancing transaction. These pricing adjustments were intended to fully

compensate SunTrust Mortgage and the investors who bought its loans for differences in borrowers’ credit risk.

49. By consulting the rate sheets in conjunction with the pricing adjustments worksheets, or computer systems that relied on the data contained in those two sources, SunTrust Mortgage mortgage brokers determined the interest rate, fees, and points to quote individual mortgage loan applicants based on their objective credit characteristics. Individual loan applicants did not have access to the rate sheets or pricing adjustment worksheets, and could not apply for a wholesale mortgage loan from SunTrust Mortgage except at the price quoted by their mortgage broker.
50. Under the Mortgage Broker Agreement, SunTrust Mortgage delegated to mortgage brokers the task o f informing prospective borrowers o f the terms and conditions under which SunTrust Mortgage wholesale mortgage loans were available. SunTrust Mortgage did not

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require the mortgage brokers to inform a prospective borrower of the lowest price for which he qualified for a specific loan product.
51. Before January 2005 and continuing through December 2009, SunTrust Mortgage gave its mortgage brokers discretion to deviate upward or downward from the loan price that was set based on the borrower’s objective credit characteristics using the rate sheets and pricing adjustment worksheets. This step o f pricing wholesale loans permitted mortgage brokers to exercise subjective, unguided discretion in setting the final price SunTrust Mortgage charged to individual borrowers, unrelated to a borrower’s credit risk characteristics.
52. Mortgage brokers who supplied SunTrust Mortgage with mortgage loan applications that SunTrust Mortgage funded were compensated in two ways. One was through a yield spread premium (“YSP”), an amount paid by SunTrust Mortgage to the brokers based on the extent to which the interest rate charged on a mortgage loan exceeded the rate, based on a borrowers’ particular credit qualifications, set by the rate sheet and pricing adjustment worksheet. The second way brokers were compensated was through direct fees paid to brokers out o f borrowers’ funds, including loan proceeds at the loan closing.
53. Based on these two forms o f compensation, SunTrust Mortgage calculated the “total compensation charged on each wholesale mortgage loan. Higher total compensation raised the borrower’s price for a loan, through a higher note interest rate, a higher final annual percentage rate charged on a loan, and/or a higher final total amount borrowed. SunTrust Mortgage continued to allow mortgage brokers to charge YSPs and raise their compensation through pricing adjustments through at least December 2009.

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54. During the time period at issue, SunTrust Mortgage was fully informed of all broker compensation to be charged with respect to each individual residential loan application presented to it. The Mortgage Broker Agreement required brokers to provide “full and complete information” regarding all broker compensation charges at least two days prior to the loan’s closing.

55. The Mortgage Broker Agreement allowed SunTrust Mortgage to control the charges it included in the terms o f the loan for broker compensation. SunTrust Mortgage exercised its

right to control broker compensation, but it left wide discretion to mortgage brokers on the

compensation charge that SunTrust Mortgage included in the terms of the loan between at least January 2005 and December 2009. Beginning prior to Januaiy 2005 and continuing through

December 2009, SunTrust Mortgage’s policy and practices allowed brokers subjective, unguided

discretion in setting the amount of broker compensation charged to individual borrowers. Prior

to August 2008, SunTrust Mortgage placed a 5% ceiling on broker compensation, apart from

YSP, it charged to borrowers in agency mortgage loan products (loans saleable to Fannie Mae

and Freddie Mac). Starting in August 2008, SunTrust Mortgage placed a purported 3.5% ceiling

on total compensation, including a 3% ceiling on YSP, it charged to wholesale borrowers,

subject to exceptions made by wholesale channel managers. These caps allowed wide discretion

to mortgage brokers because the maximum permissible amount far exceeded the average total compensation charged by its mortgage brokers between 2005 and 2009.

56.

Other than these caps, SunTrust Mortgage did not establish any objective criteria, or

provide guidelines, instructions, or procedures to be followed by brokers in setting the amount of

total compensation to be charged to borrowers. Mortgage brokers exercised this pricing

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discretion SunTrust Mortgage gave them, untethered to any objective credit characteristics, on every loan they brought to SunTrust Mortgage for origination and funding. SunTrust Mortgage affirmed or ratified these discretionary pricing adjustments for all the wholesale loans it originated and funded. SunTrust Mortgage did not review the reasonableness of charges that fell within the ceiling before including them in the terms of the loan. Moreover, SunTrust Mortgage funded hundreds o f mortgage loans in 2009 that included total compensation exceeding the ceiling dictated by its policy.
57. Charging higher total compensation on the basis of race and national origin, whether through SunTrust Mortgage’s inclusion of a higher YSP or higher direct broker fees in the price of the mortgage loan, is a discriminatory lending practice by SunTrust Mortgage prohibited by the FHA and the ECOA.
58. For each wholesale mortgage loan that SunTrust Mortgage originated, information about each borrower’s race and national origin and the amount and types of broker fees paid was available to, and was known by, SunTrust Mortgage prior to the approval and funding o f the loan. SunTrust Mortgage was required to collect, maintain, and report data with respect to significant mortgage loan terms and borrower information for residential loans, including the race and national origin o f each wholesale home loan borrower, pursuant to HMDA.
59. SunTrust Mortgage regularly monitored between 2005 and 2009 the race and national origin disparities that existed in the total compensation it charged on wholesale mortgage loans, and it knew race and national origin disparities in total compensation it charged existed throughout that period on the national level and in multiple regional markets. Notwithstanding its knowledge about these disparities, SunTrust Mortgage’s “Broker Fair
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Lending Communication Strategy” from March 2009 told its executives who managed relationships with mortgage brokers that brokers “should not be given any specific guidance as to how to eliminate or minimize disparities in pricing.” .
60. Statistical analyses o f wholesale mortgage loans originated by SunTrust Mortgage between January 2005 and December 2009 demonstrate statistically significant discriminatory pricing disparities in wholesale mortgage loans based on race and national origin.
61. Measured on a nationwide basis by total compensation, in each year between 2005 and 2009, SunTrust Mortgage charged African-American borrowers whom SunTrust Mortgage determined had the credit characteristics to qualify for a home mortgage loan more in pricing adjustments not based on borrower risk for wholesale loans than non-Hispanic White borrowers. The annual total compensation disparities ranged between approximately 20 and 66 basis points, and they are statistically significant.
62. Measured on a nationwide basis by total compensation, in each year between 2005 and 2009, SunTrust Mortgage charged Hispanic borrowers whom SunTrust Mortgage determined had the credit characteristics to qualify for a home mortgage loan more in pricing adjustments not based on borrower risk for wholesale loans than non-Hispanic White borrowers. The annual total compensation disparities ranged between approximately 16 and 29 basis points, and they are statistically significant.
63. In approximately 52% o f high loan-volume markets in 2005 (11 of 21), defined for purposes of this paragraph as those MSAs and non-MSA areas in each state where SunTrust Mortgage made more than 100 total wholesale mortgage loans and 30 or more wholesale mortgage loans to African-American borrowers in a given year, SunTrust Mortgage charged
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African-American borrowers more in pricing adjustments not based on borrower risk for wholesale loans, as measured by total compensation, than non-Hispanic White borrowers by a statistically significantly amount. In 2006, approximately 43% of such markets (15 o f 35); in 2007, approximately 65% o f such markets (28 o f 43); in 2008, approximately 88% o f such markets (21 of 24); and in 2009, approximately 82% of such markets (9 of 11) showed statistically significant total compensation disparities disfavoring African-American wholesale borrowers. The disparities in pricing adjustments not based on borrower risk resulted in AfricanAmerican borrowers in these markets paying between approximately 15 and 126 basis points more than non-Hispanic White borrowers for wholesale loans in a given year. Between 2007 and 2009, there were no high loan-volume markets in which SunTrust Mortgage charged nonHispanic White borrowers statistically significantly higher total compensation for wholesale loans than African-American borrowers in a given year; in 2005 and 2006, the number o f such markets in a given year ranged only between 1 and 3, or 5% to 9% o f the high loan-volume markets.

64.

In approximately 58% o f high loan-volume markets in 2005 (18 of 31), defined for

purposes of this paragraph as those MSAs and non-MSA areas in each state where SunTrust

Mortgage made more than 100 total wholesale mortgage loans and 30 or more wholesale

mortgage loans to Hispanic borrowers in a given year, SunTrust Mortgage charged Hispanic

borrowers more in pricing adjustments not based on borrower risk for wholesale loans, as

measured by total compensation, than non-Hispanic White borrowers by a statistically

significantly amount. In 2006, approximately 58% o f such markets (23 o f 40); in 2007,

approximately 66% of such markets (29 of 44); in 2008, approximately 91% o f such markets (30

Case 3:12-cv-00397-REP Document 1 Filed 05/31/12 Page 22 of 29 PagelD# 22
of 33); and in 2009, approximately 65% of such markets (11 o f 17) showed statistically significant total compensation disparities disfavoring Hispanic wholesale borrowers. The disparities in pricing adjustments not based on borrower risk resulted in Hispanic borrowers in these markets paying between approximately 8 and 102 basis points more than non-Hispanic White borrowers for wholesale loans in a given year. In 2005, 2008, and 2009, there were no high loan-volume markets in which SunTrust Mortgage charged non-Hispanic White borrowers statistically significantly higher total compensation for wholesale loans than Hispanic borrowers in a given year; in 2006 and 2007, the number of such markets in a given year ranged only between 1 and 4, or 2% to 10% o f the high loan-volume markets.
65. These total compensation disparities mean, for example, that SunTrust Mortgage in 2007 charged a wholesale customer in Chicago borrowing $200,000 an average of about $1,265 more in pricing adjustment not based on borrower risk if he were African-American, and an average o f about $665 more if he were Hispanic, than the average amount charged to a nonHispanic White borrower. In 2008, SunTrust Mortgage charged African-American and Hispanic wholesale customers in Dallas borrowing $200,000 approximately $2,025 and $1,360, respectively, more than the average amount SunTrust Mortgage charged in pricing adjustments not based on borrower risk to a non-Hispanic White borrower.
66. In setting the terms and conditions for its wholesale mortgage loans, including interest rates, points, and fees, SunTrust Mortgage accounted for individual borrowers’ differences in credit risk characteristics by setting the prices shown on its rate sheets and pricing adjustments worksheets for each loan product to include its assessment of applicant creditworthiness as explained in Paragraphs 47-49. SunTrust Mortgage’s mortgage brokers’

Case 3:12-cv-00397-REP Document 1 Filed 05/31/12 Page 23 of 29 PagelD# 23
pricing adjustments, as measured by total compensation, were separate from and not controlled by the credit risk adjustments already reflected in the rate sheets and pricing adjustments worksheets. SunTrust Mortgage reviewed these pricing adjustments and then charged them to borrowers in the loans it originated and funded. Accordingly, the race and national origin total compensation disparities described in Paragraphs 61-64 are not adjusted for borrowers’ credit risk characteristics.
67. Regression analyses of SunTrust Mortgage wholesale pricing that control for creditrelated factors such as credit score, loan amount, loan to value ratio, loan purpose, and others, also demonstrate that the race and national origin disparities in pricing adjustments described in Paragraphs 61-64 produced race and national origin disparities in the annual percentage rate of interest charged by SunTrust Mortgage between 2005 and 2009 to African-American and Hispanic wholesale borrowers that cannot be explained by credit risk factors. Thus, accounting for borrower credit risk factors does not explain the race and national origin disparities, even if those factors were relevant to the subjective pricing adjustments measured by’total compensation.
68. The statistically significant race and national origin disparities in total compensation described in Paragraphs 61-64 for African-American and Hispanic wholesale borrowers who SunTrust Mortgage determined had the credit characteristics to qualify for a home mortgage loan resulted from the implementation and the interaction o f SunTrust Mortgage’s policies and practices that: (a) included pricing terms based on the subjective and unguided discretion of mortgage brokers in setting pricing adjustments not based on borrower risk for wholesale loans, as measured by total compensation, in the terms and conditions o f loans SunTrust Mortgage

Case 3:12-cv-00397-REP Document 1 Filed 05/31/12 Page 24 of 29 PagelD# 24
originated after the loan price had been established by reference to credit risk characteristics; (b) did not require mortgage brokers to justify or document the reasons for the amount of pricing adjustments not based on borrower risk for wholesale loans, as measured by total compensation; (c) failed to adequately monitor for and fully remedy the effects o f race and national origin disparities in total compensation; and (d) created a financial incentive for mortgage brokers to charge interest rates above the interest rates SunTrust Mortgage had set based on credit risk characteristics. Total compensation specifically measures the pricing variation caused by the subjective and unguided pricing adjustments not based on borrower risk. SunTrust Mortgage continued to use these discretionary wholesale pricing policies, to inadequately document and review the implementation of that pricing component, and to incentivize upward broker adjustments to pricing through at least the end o f 2009.
69. SunTrust Mortgage’s policies and practices identified in the previous Paragraph were not justified by business necessity or legitimate business interests. There were less discriminatory alternatives available to SunTrust Mortgage than these policies or practices.
70. SunTrust Mortgage had knowledge that the subjective and unguided discretion it granted to mortgage brokers in its wholesale mortgage loan pricing policies and practices was being exercised in a manner that discriminated against African-American and Hispanic borrowers, but continued to implement its policies and practices with that knowledge. SunTrust Mortgage did not take effective action before the end o f 2009 to change the pricing adjustment policies or practices to fully eliminate their discriminatory impact, nor did it change its compensation policy to discourage the charging of higher pricing adjustments. It did not act

Case 3:12-cv-00397-REP Document 1 Filed 05/31/12 Page 25 of 29 PagelD# 25
before the end o f 2009 to identify or compensate the individual borrowers who were victims of its discriminatory wholesale mortgage loan pricing policies or practices.
FAIR HOUSING ACT and EQUAL CREDIT OPPORTUNITY ACT VIOLATIONS 71. SunTrust Mortgage’s residential lending-related policies and practices and the
policies and practices it followed in residential credit transactions as alleged herein constitute: a. Discrimination on the basis o f race and national origin in making available, or
in the terms or conditions of, residential real estate-related transactions, in violation o f the Fair Housing Act, 42 U.S.C. § 3605(a);
b. Discrimination on the basis of race and national origin in the terms, conditions, or privileges of the provision o f services in connection with sale of a dwelling, in violation of the Fair Housing Act, 42 U.S.C. § 3604(b); and
c. Discrimination against applicants with respect to credit transactions on the basis of race and national origin in violation of the Equal Credit Opportunity Act. 15 U.S.C. § 1691(a)(1). 72. SunTrust Mortgage’s residential lending-related policies and practices as alleged herein constitute:
a. A pattern or practice o f resistance to the full enjoyment o f rights secured by the Fair Housing Act, 42 U.S.C. §§ 3601-3619, and the Equal Credit Opportunity Act, 15 U.S.C. §§ 1691-1691 f; and
b. A denial of rights granted by the Fair Housing Act to a group of persons - both African-Americans and Hispanics - that raises an issue of general public importance.

Case 3:12-cv-00397-REP Document 1 Filed 05/31/12 Page 26 of 29 PagelD# 26

73. Between 2005 and 2009, more than 20,000 persons throughout the nation have been

victims of SunTrust Mortgage’s pattern or practice o f discrimination and denial o f rights as alleged herein. In addition to higher direct economic costs, some of the victims of discrimination suffered additional consequential economic damages resulting from having an excessively costly

loan, including possible increased risk of credit problems, and other damages, including

emotional distress. They are aggrieved persons as defined in the Fair Housing Act, 42 U.S.C. §

3602(i), and aggrieved applicants as defined in the Equal Credit Opportunity Act, 15 U.S.C. §

1691e, and have suffered injury and damages as a result of SunTrust Mortgage’s conduct.

Attachment A depicts the states where these aggrieved persons described in Paragraphs 35 and 63-64 were located when the discrimination occurred.

74. SunTrust Mortgage’s policies and practices, as described herein, were intentional,

willful, or implemented with reckless disregard for the rights o f African-American and Hispanic borrowers.

RELIEF REQUESTED WHEREFORE, the United States prays that the Court enter an ORDER that:
(1) Declares that the policies and practices of the Defendant constitute violations of the

Fair Housing Act, 42 U.S.C. §§ 3601-3619, and the Equal Credit Opportunity Act, 15 U.S.C. §§ 1691-1691 f;

(2) Enjoins the Defendant, its agents, employees, and successors, and all other persons in active concert or participation with it, from:

a.

Discriminating on the basis of race and national origin against any person in

making available, or in the terms or conditions of, a residential real estate-related

transaction;

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Case 3:12-cv-00397-REP Document 1 Filed 05/31/12 Page 27 of 29 PagelD# 27
b. Discriminating on the basis of race and national origin in the terms, conditions, or privileges of the provision o f services in connection with the sale of dwellings;
c. Discriminating on the basis o f race and national origin against any person with respect to any aspect o f a credit transaction;
d. Failing or refusing to take such affirmative steps as may be necessary to restore, as nearly as practicable, the victims of the Defendant’s unlawful conduct to the position they would have been in but for the discriminatory conduct; and
e. Failing or refusing to take such affirmative steps as may be necessary to prevent the recurrence o f any such discriminatory conduct in the future; to eliminate, to the extent practicable, the effect o f the Defendant’s unlawful practices; and to implement policies and procedures to ensure that all borrowers have an equal opportunity to seek and obtain loans on a non-discriminatory basis and with non-discriminatory terms and conditions; (3) Awards monetary damages to all the victims of the Defendant’s discriminatory policies and practices for the injuries caused by the Defendant, including direct economic costs, consequential economic damages, and other damages, pursuant to 42 U.S.C. § 3614(d)(1)(B) and 15 U.S.C. § 1691e(h); and (4) Assesses a civil penalty against the Defendant in an amount authorized by 42 U.S.C. § 3614(d)(1)(C), in order to vindicate the public interest.

Case 3:12-cv-00397-REP Document 1 Filed 05/31/12 Page 28 of 29 PagelD# 28

The United States further prays for such additional relief as the interests o fjustice may require.

NEIL H. MACBRIDE United States Attorney

ERIC H. HOLDER, JR. Attorney General THOMAS E. PEREZ Assistant Attorney General Civil Rights Division STEVEN H. ROSENBAUM Chief Civil Rights Division Housing and Civil Enforcement Section JON M. SEWARD Deputy Chief Civil Rights Division Housing and Civil Enforcement Section

Virginia Bar Number 66113 Assistant United States Attorney 600 E. Main Street, Suite 1800 Richmond, Virginia 23219 Email: Robert.McIntosh@usdoj.gov Phone: 804-819-5400 Fax: 804-819-7417

DANIEL P. MOSTELLER Trial Attorney United States Department o f Justice Civil Rights Division Housing and Civil Enforcement Section 950 Pennsylvania Ave., N.W. - NWB Washington, D.C. 20530
Email: Daniel.Mosteller@usdoj.gov Phone: 202-514-4713 Fax: 202-514-1116

Case 3:12-cv-00397-REP Document 1 Filed 05/31/12 Page 29 of 29 PagelD# 29

The United States further prays for such additional relief as the interests o fjustice may

require.

NEIL H. MACBRIDE United States Attorney

ERIC H. HOLDER, JR. Attorney General THOMAS E. PEREZ Assistant Attorney General Civil Rights Division STEVEN H. ROSENBAUM Chief Civil Rights Division Housing and Civil Enforcement Section JON M. SEWARD Deputy Chief Civil Rights Division Housing and Civil Enforcement Section

ROBERT P. MCINTOSH Virginia Bar Number 66113 Assistant United States Attorney 600 E. Main Street, Suite 1800 Richmond, Virginia 23219 Email: Robert.McIntosh@usdoj.gov Phone: 804-819-5400 Fax: 804-819-7417

DANIEL P. MOSTELLER Trial Attorney United States Department of Justice Civil Rights Division Housing and Civil Enforcement Section 950 Pennsylvania Ave., N.W. -N W B Washington, D.C. 20530 Emai1: Dan iel.Mosteller@usdoj.gov Phone: 202-514-4713 Fax: 202-514-1116

United States v. SunTrust Mortgage, Inc.
Attachment A Jurisdictions With Substantial Concentrations of Aggrieved Persons (34 States and the District of Columbia)
Prepared by: U.S. Department of Justice
Civil Rights Division Washington, D.C . 20530

 
 UNITED STATES DISTRICT COURT 
 EASTERN DISTRICT OF VIRGINIA 

RICHMOND DIVISION 


UNITED STATES OF AMERICA, Plaintiff, )

)

v.

)

)

SUNTRUST MORTGAGE, INC., Defendant. )

)

No·3:/2cv3 07

CONSENT ORDER I. INTRODUCTION This Consent Order (Order) is submitted jointly by the parties for the approval of and entry by the Court simultaneously with the filing of the United States' Complaint in this action. The Order resolves the claims of the United States that, during and between 2005 and 2009, the Defendant engaged in a pattern or practice of conduct in violation of the Equal Credit Opportunity Act (ECOA), 15 U.S.C. §§ 1691-1691f, and the Fair Housing Act (FHA), 42 U.S.C. §§ 3601-3619, by discriminating on the basis ofrace and national origin in the extension of residential credit and in the making of residential real estate-related transactions. There has been no factual finding or adjudication with respect to any matter alleged by the United States. The parties have entered into the Order to avoid the risks, expense, and burdens oflitigation and to resolve voluntarily the claims in the United States' Complaint of the Defendant's alleged violations of federal fair lending laws. II. BACKGROUND SunTrust Mortgage has been one· ofthe nation's largest mortgage lenders since SunTrust Bank's 1998 acquisition of Richmond-based Crestar Bank and Crestar Mortgage Corporation. From 2005-2009, SunTrust Mortgage annually originated between 120,000 and 200,000
fD)rn©@DWrn:rm ~ MAY 31 2012 lW
CLERK, U.S. DISTRICT COURT 
 RICHMOND. VA 


mortgage loans with an annual principal value of more than $30 billion through its retail and wholesale channels. Throughout that period, SunTrust Mortgage offered nearly every type of mortgage loan product available in the market, and it generally concentrated on confonning prime loans.
In 2007, Federal Reserve System examiners initiated a fair lending review of SunTrust Mortgage's mortgage pricing practices. As a result of that review, the Federal Reserve Board ("FRB") determined that it had "reason to believe that SunTrust Mortgage Incorporated engaged in a pattern or practice of mortgage pricing discrimination based on race, color and national origin in violation of Section 701(a) of the Equal Credit Opportunity Act and the Fair Housing Act" for loans made during 2005 and 2006. Following that determination, and pursuant to 15 U.S.C. § 1691e(g), the FRB referred the matter to the Department of Justice on December 3, 2009.
In its Complaint, the United States alleges that between 2005 and 2009, SunTrust Mortgage engaged in a pattern or practice of discrimination on the basis of race and national origin in violation of both the FHA and the ECOA based on the interest rates, fees, and costs paid by African-American and Hispanic borrowers who received loans from its retail and wholesale lending channels.
Defendant denies all the allegations and claims of a pattern or practice of discrimination in violation of the FHA and the ECOA as set forth in the United States' Complaint: Defendant asserts that at all times it conducted its lending in compliance with the letter and spirit of the fair lending laws and in a non-discriminatory manner. Defendant maintains that any differences in pricing were attributable to legitimate, non-discriminatory factors. Notwithstanding its disagreement with the allegations of the United States, Defendant has agreed to the entry of this
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order to resolve voluntarily the claims asserted by the United States in order to avoid the costs, risks, and burdens of litigation.
In 2009, Defendant implemented policies and monitoring that substantially lessened loan pricing disparities on the basis of race or national origin in Defendant's retail lending channel. Under the provisions of the Order, the Defendant agrees to maintain policies and procedures designed to ensure that the price charged for its residential loan products, including the portion of the price that reflects the discretion of the loan officer or mortgage broker, is set in a nondiscrimin~tory manner consistent with the requirements of the FHA and the ECOA. In addition; the Defendant will compensate certain Hispanic and African-American borrowers as provided herein.
III. REMEDIAL ORDER 1. Unless otherwise stated herein, the remedial provisions of the Order shall be implemented within thirty (30) days bfthe Effective Date of the Order and shall continue throughout its term. The Effective Date of the Order shall be the date on which it is approved and entered by the Court. A. General Nondiscrimination Injunction 2. The Defendant, including all of its officers, employees, agents, assignees, successors in interest, and all those in active concert or participation with any of them, is hereby enjoined from the adoption, performance, or implementation of any policy, practice, or act that results in discrimination on the basis of race or national origin in the charging of loan prices, including the portion of the loan price that reflects the discretion of the loan officer or the compensation of mortgage brokers, to those who borrow money secured by residential real estate in violation ofthe FHA, or in violation ofthe ECOA.
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B. Lending Policies and Procedures 3. Consistent with Regulation Z, 12 C.F.R. § 1026.36(d), the Defendant shall

prohibit, for all loans secured by residential real estate originated in its name, employees and mortgage brokersl from receiving, directly or indirectly, overages,2 yield spread premiijIlls, or

other compensation in an amount that is based on any of the terms or conditions of a loan

secured by residential real estate, including the annual percentage rate of interest charged to the

borrower or the amount by which it varies from the par rate. This prohibition shall not limit

compensation that is based on the principal amount of a loan, provided the compensation is

based on a fixed percentage of the principal; however, such compensation may be subject to a

minimum or maximum dollar amount. This prohibition also shall not limit the Defendant from

allowing a borrower to finance, at the option of the borrower, including through principal or rate,

any origination fees or costs, so long as such fees or costs do not vary based on the terms of the

loan (other than the amount of the principal) or the borrower's decision about whether to finance such fees or costs.3

4. The Defendant shall maintain specific standards, substantially similar to those

detailed in its the June 2012 Guidelines under the heading "Pricing and Compensation Practices:

Retail and Consumer Direct Channels," which are designed to avoid unlawful discrimination by

the Defendant, based on a borrower's race or national origin,for the assessment of all origination

1 The term "mortgage broker" in the Order follows the definition contained in 12 C.F.R. § 1026.36(a), and includes both natural persons and organizations.

2 The terms "overage," "subsidy," and "total broker compensation" in the Order follow the

definition contained in SunTrust Mortgage's "Fair and Responsible Banking Policy

.

Implementation Guidelines" effective June 1,2012 ("the June 2012 Guidelines"), as provided to

the United States on May 9, 2012.

3 No term of this Consent Order will be interpreted to prevent the Defendant from complying with any federal statutory or regulatory requirement concerning employee or mortgage broker compensation or loan pricing.

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fees and costs it charges and retains for itself or pays to its employees on loans secured by residential real estate. For the duration of the Order, the Defendant shall continue to maintain its· policy implemented on April 1, 2010 of prohibiting overages in its reta~l channel. The Defendant shall also maintain its poli~y of prohibiting subsidies exceeding 100 basis points (subject to the exceptions provided in the June 2012 Guidelines), and requiring employees to document the reason for any subsidy. Before funding any loan, the Defendant shall ensure it maintains documentation of compliance with the standards established to satisfy this Paragraph.
5. The Defendant shall maintain specific standards, substantially similar to those detailed in its the June 2012 Guidelines under the heading "Pricing and Compensation Practices: Broker Channel," which are designed to avoid unlawful discrimination by the Defendant based on a borrower's race or national origin, for the total broker compensation paid to mortgage brokers on loans secured by residential real estate that are originated in the Defendant's name and that the Defendant underwrites, originates, or funds. For the duration of the Order, the Defendant shall continue to maintain its policy implemented in November 2009 of limiting total broker compensation to the higher of3.5% of the loan amount or $3,000. The Defendant shall also maintain its policy that lender-paid compensation to brokers (including payments by the Defendant to a broker made out ofloan proceeds) is an agreed-upon amount per loan that does not vary by loan and can only be changed on a quarterly basis. The Defendant shall ensure compliance with these standards is a part of any agreement that provides for a mortgage broker to submit loan applications to the Defendant. To the extent the standards established to satisfy this Paragraph allow mortgage brokers to exercise discretion in the amount of the total broker compensation, mortgage brokers will provide a written explanation for borrower-paid total broker compensation that exceeds 2.5% of the loan amount. Before funding any loan, the
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Defendant shall ensure it maintains documentation of compliance with the standards established to satisfY this Paragraph.
6. The Defendant shall require, for all loans secured by residential real estate originated in its name, all employees and mortgage brokers to comply with the requirements established in Paragraphs 3-5. The Defendant shall also require an appropriate manager, under the supervision of a designated senior official of the Defendant, to review compliance with these requirements and to ensure that discretionary loan prices do not vary materially by race Or national origin without a legitimate nondiscriminatory explanation for such variation. In the event that Defendant receives or pays compensation in excess of what is permitted by the policies referenced in Paragraphs 3-5, an appropriate refund will be provided to the borrower in the form of a cash payment or credit to the borrower's account. All reviews shall be documented, and such documentation shall be retained for the term of the Order.
C. Monitoring Program 7. The Defendant for the duration of the Order shall maintain no less than its currently existing level of fair lending auditing and monitoring detailed in SunTrust Mortgage's "Fair and Responsible Banking: Mortgage Pricing Regression Analysis (Retail)" and "Fair and Responsible Banking" Mortgage Pricing Regression Analysis (Broker)" procedure documents last reviewed on May 1,2012 ("the May 2012 Procedures"), as provided to the United States on May 11 and 14,2012. 8. Within 30 days of the Effective Date of the Order, the Defendant shall have in place a monitoring program designed to ensure compliance with the Order. The program shall be designed to monitor, for all loans secured by residential real estate originated in its name, for potential unexplained disparities by a borrower's race or national origin in the price charged for its residential loan products. At a minimum, the Defendant shall monitor APRs, overages,
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subsidies, and total broker compensation. The monitoring shall include, but not be limited to, an analysis designed to detect significant unexplained disparities in the price charged for its residential loan products by race and national origin, with respect to all loans secured by residential real estate originated in the Defendant's name. Such analysis will be conducted at the national level and at a metropolitan statistical area (MSA) level for MSAs where the Defendant annually originates at least 100 loans, including at least 30 loans to non-Hispanic whites and 30 loans to either African-Americans or Hispanics.
9. The Defendant's senior managers shall conduct a quarterly review of the monitoring program. A report on the review shall be presented to the appropriate committee of the Defendant's Board of Directors for approval not later than 60 days after the end of each quarter.
a. In the event that any such review discloses statistically significant at the 95% level disparities at the national level or in any MSA, the Defendant shall attempt to determine the reason(s) for those disparities and shall promptly take corrective action to address significant disparities that were caused by a policy or practice ofthe Defendant, and not justified by legitimate business need. Corrective action shall include, as warranted, financial remediation for borrowers, modifications to the Defendant's pricing policies and/or monitoring programs as appropriate, and education, discipline or termination of employee(s) or mortgage broker relationship(s). The Defendant shall document all such disparities, determinations, and actions taken and shall provide a
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summary of the quarterly reviews and any documentation and analysis relating thereto to the United States on a semi-annual basis.4
b. In the event that any such review discloses statistically significant disparities with respect to any particular employee, branch office, or mortgage broker, the Defendant shall require the employee, branch manager, or mortgage broker to explain the non-discriminatory reason(s) for those disparities. If there is no reasonable, nonracial explanation for the noted disparities, the Defendant shall require the employee or branch mana,ger to take prompt corrective action to address the disparities, and the Defendant shall take prompt appropriate" action with respect to mortgage brokers, up to and including termination of the broker relationship. lfthe United States raises any objections to the Defendant's determinations or remedial actions, the Defendant and the United States shall meet and confer to consider appropriate steps to address the concerns raised by the United States' review. If the parties are unable to come to an agreement regarding such objections, any party may bring the dispute to this Court for resolution.
4 All material required by the Order to be sent to the United States shall be sent by commercial overnight delivery service addressed as follows: Chief, Housing and Civil Enforcement Section, Civil Rights Division, U.S. Department of Justice, 1800 G Street NW, Suite 7002, Washington, DC 20006, Attn: DJ 188-79-19, or by facsimile to 202-514-1116. The Defendant may redact portions based on an assertion of attorney-client privilege from any materials required by the Order to be sent to the United States or to be subject to review by the United States, or, upon notice to the United States, it may withhold materials based on an assertion of attorney-client privilege applying to an entire document. If the United States raises any objections to the Defendant's claim of privilege, the Defendant and the United States shall meet and confer to resolve the dispute. If the parties are unable to come to a resolution, the United States may ask this Court to determine whether the claim ofprivilege is legally correct.
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D. Borrower Disclosures 10. The Defendant shall post and prominently display in each location where it receives loan applications a notice of nondiscrimination that satisfies the requirements of 24 C.F.R. Part 110. E. Equal Credit Opportunity Training Program 11. Within 90 days of the Effective Date of the Order, the Defendant shall provide access to a copy ofthe Order and the policies referenced therein to its management officials and employees who participate in taking applications for, originating, or pricing loans secured by residential real estate, including employees who have significant contact with or oversight of mortgage brokers. The Defendant shall provide access to a copy of the Order and the policies referenced therein to each new management official or employee whose responsibilities include those s~t forth in the preceding sentence within30 days of beginning his or her employment in that position. 12. Within 150 days of the Effective Date ofthe Order, and annually thereafter for the duration of the Order, the Defendant shall provide equal credit opportunity training to its management officials and employees who participate in taking applications for, originating, or pricing loans secured by residential real estate, including employees who have significant contact with or oversight of mortgage brokers. The Defendant shall provide equal credit opportunity training to each new management official or employee whose responsibilities include those set forth in the preceding sentence within 90 days of beginning his or her employment in that position. 13. During the equal credit opportunity training, the Defendant shall provide to each participant training on the terms of the Order, the policies referenced therein, the requirements of the FHA, the ECOA, and his or her responsibilities under each. The content of the training
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program required by this Paragraph shall be approved in advance by the United States. Any expenses associated with this training program shall be borne by the Defendant. At the conclusion of the training program, the Defendant will require each employee to successfully complete an assessment which demonstrates that the employee was provided access to a copy of the Order and the policies referenced therein, understands his or her legal responsibility not to discriminate, and has completed the equal credit opportunity training.
14. The Defendant shall offer all mortgage brokers who submit applications to the Defendant for loans secured by residential real estate the opportunity to undergo fair lending training similar to the training described in Paragraph 13. The Defendant shall retain for the duration of the Order documentation of any training conducted or requests for training made pursuant to this Paragraph, and make such documentation available to the United States upon request.
F. Satisfaction of United States' Claims for Monetary Relief 15. The Defendant shall deposit in an interest-bearing escrow account the total sum of $21 million to compensate for alleged monetary damages aggrieved persons nationwide may have suffered as a result of the alleged violations of the FHA and the ECOA (the "Settlement Fund"). Title to this account shall specify that it is "for the benefit of allegedly aggrieved persons pursuant to Order of the Court in United States v. SunTrust Mortgage, Inc." The Defendant shall provide written verification of the deposit to the United States within 5 days of the Effective Date of the Order. Any interest that accrues shall become part of the Settlement Fund and be utilized and disposed of as set forth herein. 16. The United States has requested from the Defendant information and data it reasonably believes will assist in identifying allegedly aggrieved persons and determining any damages. Such information and data shall be used by the United States only for the law
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enforcement purposes of implementing this Order. Within 90 days of the date on which the United States provides an electronic file specifying the loans for which it requests data, the Defendants shall supply, to the extent that it is within the control of the Defendant, the Defendant's parent, or any entity owned by the Defendant's parent, the requested information and data. To the extent that the information is not within the control of those parties, the Defendant shall, within 90 days of receipt of such request, supply any data in the control of those parties that identifies other parties that may have that the information. The United States shall, upon reasonable notice, be allowed access to mortgage loan files and borrower contact information contained in servicing records of the Defendant, the Defendant's parent, or any entity owned by the Defendant's parent for loans the Defendant originated between 2005 and 2009 to verify the accuracy of the data provided and to otherwise identify persons entitled to the payments from the Settlement Fund.
17. Within 60 days of entry of the Order, the Defendant shall enter into a contract retaining a Settlement Administrator ("Administrator"), subject to approval by the United States, to conduct the activities set forth in the following Paragraphs. The Defendant shall bear all costs and expenses of the Administrator, and the Defendant's contract with the Administrator shall require the Administrator comply with the provisions of the Order as applicable to the Administrator.5 The Administrator's contract shall require the Administrator to work cooperatively with the United States in the conduct of its activities, including reporting regularly
5 In the event the United States has reason to believe that the Administrator is not materially complying with the terms of its contract with the Defendant, the United States and the Defendant shall meet and confer for the purpose of mutually agreeing upon a course of action to effect the Administrator's material compliance with its contract with the Defendant. In the event that the United States and the Defendant are unable to agree upon a course of action to effect the Administrator's material compliance with its contract with the Defendant, the parties may present the matter to the Court.
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to and providing all reasonably requested information to the United States. The Defendant shall allow the Administrator access to mortgage loan files and borrower contact information contained in servicing records of the Defendant, the Defendant's parent, or any entity owned by the Defendant's parent for loans the Defendant originated between 2005 and 2009 for the purposes of accomplishing its duties under the Order. The Administrator's contract shall require the Administrator to comply with all confidentiality and privacy restrictions applicable to the party who supplied the information and data to the Administrator.
18. The United States shall identifY allegedly aggrieved persons with respect to its race and national origin discrimination claims within 90 days of receipt of all the information and data it requested. The United States shall provide a list of allegedly aggrieved persons to the Defendant and the Administrator.
19. The Administrator's contract shall require the Administrator to make its best efforts, using all reasonable methods, to locate each identified allegedly aggrieved person and obtain such information as the United States reasonably considers necessary from each. The Administrator's contract shall require the Administrator to complete this responsibility within a period of 6 months from the date the United States provides the list described in Paragraph 18, subject to an extension of time as provided by Paragraphs 23 and 31. The Administrator's contract shall require the Administrator, as part of its operation, to establish cost-free means for allegedly aggrieved persons to contact it, such as email and a toll-free telephone number.
20. The United States shall specifY the amount each allegedly aggrieved person identified in Paragraph 18 and located by the Administrator shall receive from the Settlement Fund no later than 120 days after the Administrator's deadline for locating aggrieved persons in
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Paragraph 19 has passed. The United States shall provide the compensation list to the Administrator.
21. The Administrator's contract shall require the Administrator to send releases, with language approved by the United States and the Defendant as set forth in Appendix A, to allegedly aggrieved persons (hereafter, "Releases"). After receipt of executed releases, the Administrator's contract shall require the Administrator promptly to deliver payments to those persons in amounts determined by the United States as described in Paragraph 20. The Administrator's identification and payment responsibility may take place on a rolling basis with approval from the United States.
22. The Administrator's contract shall require the Administrator to set forth reasonable deadlines, subject to approval of the United States, so that the compensation is distributed and checks are presented for payment or become void prior to the date that is 24 months from the date the Administrator begins to locate allegedly aggrieved persons pursuant to Paragraph 19.
23. Payments from the Settlement Fund to allegedly aggrieved persons shall be subject to the following conditions, provided that the details in administration of the Settlement Fimd set forth in Paragraphs 16-22, can be modified by agreement of the parties and without further Court approval:
(a) No allegedly aggrieved person shall be paid any amount from the Settlement Fund until he or she has executed and delivered to the Defendant a Release; and
(b) The total amount paid by the Defendant collectively to the allegedly aggrieved persons shall not exceed the amount ofthe Settlement Fund, including accrued interest.
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24. All money not distributed to allegedly aggrieved persons from the Settlement Fund, including accrued interest, within 24 months from the date the Administrator begins to locate allegedly aggrieved persons pursuant to Paragraph 19 shall be distributed to qualified organization(s) that provide services including credit and housing counseling (including assistance in obtaining loan modification and preventing foreclosure), legal representation of borrowers seeking to obtain a loan modification or to prevent foreclosure, financial literacy, and other related programs targeted at African-American and Hispanic potential and former homeowners in communities where the Complaint alleges significant discrimination occurred· against African-American and Hispanic borrowers. Recipient(s) of such funds must not be related to the Defendant, the Defendant's parent, or any entity owned by the Defendant's parent. The Defendant will consult with and obtain the non-objection of the United States in selecting recipient(s) of these funds and the amount to be distributed to each, and the parties shall ob1:;lin the Court's approval prior to distribution of any remainder of the Settlement Fund's assets. The Defendant shall require each recipient to submit to the Def~ndant and the United States a detailed report on how funds are utilized within one year after the funds are distributed.
25. The Defendant shall not be entitled a set-off, or any other reduction, of the amount of payments to aggrieved persons because of any debts owed by the identified persons. The Defendant also shall not refuse to make a payment based on a release of legal claims or loan modification previously signed by any aggrieved persons.
G. Complaint Resolution Program 26. During the duration of the Order, the Defendant shall maintain a complaint resolution program to address consumer complaints alleging discrimination regarding pricing of loans secured by residential real estate originated iIi the Defendant's name. Documentation
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regarding such complaint resolution program, including documentation of individual complaints and resolutions, if any, shall be made available to the United States through the semi-annual reports referenced in Paragraph 29. A person shall not be deemed ineligible for the complaint resolution program on the basis of having executed a Release, but there is no requirement under the Order that any complaint necessarily be resolved for or against the Defendant or that any particular form or amount of relief be provided to any complainant.
IV. EVALUATING AND MONITORING COMPLIANCE 27. For the duration of the Order, the Defendant shall retain all records relating to its obligations hereunder as well as its compliance activities as set forth herein. The United States shall have the right to review and copy such records upon request, including loan files and electronic data for loans secured by residential real estate made during the duration of the Order. 28. The Defendant shall provide to the United States the data on its lending that is submitted to the Federal Financial Institutions Examination Council (FFIEC) pursuant to the Home Mortgage Disclosure Act and the Community Reinvestment Act. The data will be provided in the same format in which it is presented to the FFIEC, within 30 days of its submission to the FFIEC each year, for the duration of the Order, including the record layout. 29. In addition to the submission of any other plans or reports specified in the Order, the Defendant shall submit semi-annual reports to the United States on its progress in completing the requirements of the Order. Each such report shall provide a complete account of the Defendant's actions to comply with each requirement of the Order during the previous 6 months, an objective assessment of the extent to which each quantifiable obligation was met, an explanation of why any particular component fell short of meeting its goal for the previous 6 months, and any recommendations for additional actions to achieve the goals of the Order. Each such report shall detail any changes made to the June 2012 Guidelines or the May 2012
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Procedures during the previous 6 months. The Defendant shall submit its first report no later than 180 days after the Effective Date of the Order, and every 180 days thereafter for so long as the Order is in effect. In addition, if applicable, the Defendant shall attach to the semi-annual reports representative copies of training materials disseminated pursuant to the Order.
V. ADMINISTRATION 30. The Order shall terminate 3 months after the submission of the Defendant's sixth semi-annual report due under Paragraph 29 to the United States, except that if all the actions required by Paragraphs 15 through 25 have not been completed, Paragraphs 15 to 25 and this section will continue in effect for an additional six months. Notwithstanding the above, the Order may be extended further upon motion ofthe United States to the Court, for good cause shown. 31. Any time limits for performance fixed by the Order may be extended by mutual written agreement of the parties. Except as provided by Paragraph 23, other modifications to the Order may be made only upon approval of the Court, upon motion by either party. The parties recognize that there may be changes in relevant and material factual circumstances during the duration of the Order which may impact the accomplishment of its goals. The parties agree to work cooperatively to discuss and attempt to agree upon any proposed modifications to the Order resulting therefrom. 32. The Order shall be binding on the Defendant, including all its officers, employees, agents, assignees, and successors in interest, and all those in active concert or participation with any of them. The Order shall consider loans originated by a joint venture operated by the Defendant, which are also funded by the Defendant, to be loans originated by employees of the Defendant. In the event the Defendant seeks to transfer or assign all or part of its operations, and
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the successor or assign intends on carrying on the same or similar use, as a condition of sale, the Defendant shall obtain the written accession of the successor or assign to any obligations 
 remaining under the Order for its remaining term. 

33. Nothing in the Order shall excuse the Defendant's compliance with any currently or subsequently effective provision of law or order of a regulator with authority over the Defendantthat imposes additional obligations on the Defendant.
34. The parties agree that, as of the date of entry of the Order, litigation is not "reasonably foreseeable" concerning the matters described in the Order. To the extent that either party previously implemented a litigation hold to preserve documents, electronically stored information, or things related to the matters described in the Order, the party is.no longer required to maintain such a litigation hold.
35. In the event that any disputes arise about the interpretation of or compliance with the terms of the Order, the parties shall endeavor in good faith to resolve any such dispute between themselves before bringing it to this Court for resolution. If the United States believes that the Defendant has violated any provision of the Order, it will provide the Defendant written notice thereof and allow 30 days to resolve the alleged violation before presenting the matter to
this Court. In the event ofeither afailure by the Defendant to perform in a timely manner any
act required by the Order or an act by the Defendant in violation of any provision hereof, the United States may move this Court to impose any remedy authorized by law or equity.
36. The Defendant's compliance with the terms ofthe Order shall fully and [mally resolve all claims by the United States of discrimination, including under the FHA and ECOA, .that are raised in the Complaint's allegations of a pattern or practice, in loans originated between January 1, 2005 and December 31, 2009 by the Defendant, of discrimination against African­
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American and Hispanic borrowers based on racial and national origin disparities in loan prices, including all claims for equitable relief and monetary damages and penalties arising from those claims, as well as any claims under any other legal theory based on the same allegations of' discriminatory conduct addressed in the Complaint. The Order does not release claims for practices not addressed in the Complaint's allegations, including claims that may be held or are currently under investigation by any federal agency. The Order does not release any claims not related to discrimination under any statute.
37. Each party to the Order shall bear its own costs and attorneys' fees associated with this litigation.
38. The Court shall retain jurisdiction for the duration of the Order to enforce the terms of the Order, after which time the case shall be dismissed with prejudice.
SO ORDERED, this _ day of _ _ _ _, 2012.
UNITED STATES DISTRlCTJUDGE
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The undersigned hereby apply for and consent to the entry ofthe Order: For Plaintiff United States of America:

NEIL H. MACBRIDE United States Attorney
~
ROBERTP.MCINTOSH Virginia Bar Number 66113 Assistant United States Attorney 600 E. Main Street, Suite 1800 Richmond, Virginia 23219 Email: Robert.McIntosh@usdoj.gov Phone: 804-819-5400 Fax: 804-819-7417
For Defendant SunTrust Mortgage, Inc.:

THOMAS E. PEREZ Assistant Attorney General Civil Rights Division STEVEN H. ROSENBAUM Chief Civil Rights Division Housing and Civil Enforcement Section JON M. SEWARD Deputy Chief Civil Rights Division . Housing and Civil Enforcement Section
DANIEL P. MOSTELLER Trial Attorney United States Department of Justice Civil Rights Division Housing and Civil Enforcement Section 950 Pennsylvania Ave., N.W. - NWB Washington, D.C. 20530 Email: Daniel.Mosteller@usdoj.gov Phone: 202-514-4713 Fax: 202-514-1116

ANDREW L. SANDLER KIRK D. JENSEN CAITLIN M. KASMAR (Virginia Bar Number 68298) LIANA R. PRIETO BuckleySandler LLP 1250 24th Street NW, Suite 700 Washington, DC 20037 Email: Andrew.Sandler@buckleysandler.com Phone: 202-349-8000 Fax: 202-349-8080

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The undersigned hereby apply for and consent to the entry of the Order: For Plaintiff United States of America:

NEIL H. MACBRIDE 
 United States Attorney 


THOMAS E. PEREZ Assistant Attorney General Civil Rights Division STEVEN H. ROSENBAUM Chief Civil Rights Division Housing and Civil Enforcement Section JON M. SEWARD Deputy Chief Civil Rights Division Housing and Civil Enforcement Section

ROBERT P. MCINTOSH Virginia Bar Number 66113 Assistant United States Attorney 600 E. Main Street, Suite 1800 Richmond, Virginia 23219 Email: Robert.McIntosh@usdoj.gov Phone: 804-819-5400 Fax: 804-819-7417

DANIEL P. MOSTELLER Trial Attorney United States Department of Justice Civil Rights Division Housing and Civil Enforcement Section 950 Pennsylvania Ave., N.W. - NWB Washington, D.C. 20530 Email: Daniel.Mosteller@usdoj.gov Phone: 202-514-4713 Fax: 202-514-1116

For Defendant SunTrust Mortgage, Inc.:

~w1:s1dLEJ~ 

KIRK D. JENSEN CAITLIN M. KASMAR (Virginia Bar Number 68298) LIANA R. PRIETO BuckleySandler LLP 1250 24th Street NW, Suite 700 Washington, DC 20037 Email: Andrew.Sandler@buckleysandler.com
Phone:202~349-8000
Fax: 202-349-8080

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APPENDIX A

Release

In consideration for the parties' agreement to the terms of the Consent Order entered in

United States v. SunTrust Mortgage, Inc., (E.D. Va.), and the Defendant's payment to me of

$

,pursuant to the Consent Order, I hereby release and forever discharge all claims,

accruing prior to the entry of the Consent Order, related to the allegations of housing and credit

discrimination in the origination of loans secured by residential real estate at issue in the

litigation referenced above, that I may have against the Defendant, all related entities, parents,

predecessors, successors, subsidiaries, and affiliates, and all of their past and present directors,

officers, agents, managers, supervisors, shareholders, and employees and their heirs, executors,

administrators, successors,. or assigns.

Executed this _ day of_ __

Signature

Print Name

Address

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 Case 3:12-cv-00397-REP Document 15 Filed 09/14/12 Page 1 of 23 PageID# 318

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF VIRGINIA
RICHMOND DIVISION

UNITED STATES OF AMERICA, Plaintiff, )

)

v.

)

)

SUNTRUST MORTGAGE, INC., Defendant. )

)

No.3:12-cv-00397-REP

CONSENT ORDER I. INTRODUCTION This Consent Order (Order) is submitted jointly by the parties for the approval of and entry by the Court to resolve the claims of the United States that, during and between 2005 and 2009, the Defendant engaged in a pattern or practice of conduct in violation of the Equal Credit Opportunity Act (ECOA), 15 U.S.C. §§ 1691-169If, and the Fair Housing Act (FHA), 42 U.S.C. §§ 3601-3619, by discriminating on the basis of race and national origin in the extension of residential credit and in the making of residential real estate-related transactions. There has been no factual finding or adjudication with respect to any matter alleged by the United States. The parties have entered into the Order to avoid the risks, expense, and burdens of litigation and to resolve voluntarily the claims in the United States' Complaint of the Defendant's alleged violations of federal fair lending laws. II. BACKGROUND SunTrust Mortgage has been one of the nation's largest mortgage lenders since SunTrust Bank's 1998 acquisition of Richmond-based Crestar Bank and Crestar Mortgage Corporation. From 2005-2009, SunTrust Mortgage annually originated between 120,000 and 200,000 mortgage loans with an annual principal value of more than $30 billion through its retail and
[5) rn © [g 0 \YJ [g fR\
lf11 .ll! I 2012 lW
CLERK. U.S. DIS fRICT COURT RICHMOND. VA

Case 3:12-cv-00397-REP Document 15 Filed 09/14/12 Page 2 of 23 PageID# 319
wholesale channels. Throughout that period, SunTrust Mortgage offered nearly every type of mortgage loan product available in the market, and it generally concentrated on conforming prime loans.
In 2007, Federal Reserve System examiners initiated a fair lending review of SunTrust Mortgage's mortgage pricing practices. As a result of that review, the Federal Reserve Board ("FRB") determined that it had "reason to believe that SunTrust Mortgage Incorporated engaged in a pattern or practice of mortgage pricing discrimination based on race, color and national origin in violation of Section 701 (a) of the Equal Credit Opportunity Act and the Fair Housing Act" for loans made during 2005 and 2006. Following that determination, and pursuant to 15 U.S.C. § 1691e(g), the FRB referred the matter to the Department of Justice on December 3, 2009.
In its Complaint, the United States alleges that between 2005 and 2009, SunTrust Mortgage engaged in a pattern or practice of discrimination on the basis of race and national origin in violation of both the FHA and the ECOA based on the interest rates, fees, and costs paid by African-American and Hispanic borrowers who received loans from its retail and wholesale lending channels.
Defendant denies all the allegations and claims of a pattern or practice of discrimination in violation of the FHA and the ECOA as set forth in the United States' Complaint. Defendant asserts that at all times it conducted its lending in compliance with the letter and spirit of the fair lending laws and in a non-discriminatory manner. Defendant maintains that any differences in pricing were attributable to legitimate, non-discriminatory factors. Notwithstanding its disagreement with the allegations of the United States, Defendant has agreed to the entry of this
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Case 3:12-cv-00397-REP Document 15 Filed 09/14/12 Page 3 of 23 PageID# 320
order to resolve voluntarily the claims asserted by the United States in order to avoid the costs, risks, and burdens of litigation.
In 2009, Defendant implemented policies and monitoring that substantially lessened loan pricing disparities on the basis of race or national origin in Defendant's retail lending channel. Under the provisions ofthe Order, the Defendant agrees to maintain policies and procedures designed to ensure that the price charged for its residential loan products, including the portion of the price that reflects the discretion of the loan officer or mortgage broker, is set in a nondiscriminatory manner consistent with the requirements of the FHA and the ECOA. In addition, the Defendant will compensate certain Hispanic and African-American borrowers as provided herein.
III. INJUNCTIVE RELIEF A. Lending Policies and Procedures 1. The Defendant shall maintain specific standards, substantially similar to those detailed in SunTrust Mortgage's "Fair and Responsible Banking Policy Implelnentation Guidelines" effective June 1,2012 ("the June 2012 Guidelines"), as provided to the United States on May 9, 2012, under the heading "Pricing and Compensation Practices: Retail and Consumer Direct Channels," to limit disparities, based on a borrower's race or national origin, for the assessment of all origination fees and costs it charges and retains for itself or pays to its employees on loans secured by residential real estate.} For the duration of the Order, the Defendant shall c<;>ntinue to maintain its policy implemented on April 1, 2010 of prohibiting
I No term of the Consent Order will be interpreted to prevent the Defendant from complying with any federal statutory or regulatory requirement concerning employee or mortgage broker compensation or loan pricing.
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Case 3:12-cv-00397-REP Document 15 Filed 09/14/12 Page 4 of 23 PageID# 321
overages2 in its retail channel. The Defendant shall also maintain its policy of prohibiting subsidies exceeding 100 basis points (subject to the exceptions provided in the June 2012 Guidelines), and requiring employees to document the reason for any subsidy. Before funding any loan, the Defendant shall ensure it maintains documentation of compliance with the standards established to satisfy this Paragraph.
2. _The Defendant shall maintain specific standards, substantially similar to those detailed in its the June 2012 Guidelines under the heading "Pricing and Compensation Practices: Broker Channel," to limit disparities, based on a borrower's race or national origin, for the total broker compensation paid to mortgage brokers3 on loans secured by residential real estate that are originated in the Defendant's name and that the Defendant underwrites, originates, or funds. For the duration of the Order, the Defendant shall continue to maintain its policy implemented in November 2009 of limiting total broker compensation to the higher of3.5% ofthe loan amount or $3,000. The Defendant shall also maintain its policy that lender-paid compensation to brokers (including payments by the Defendant to a broker made out of lo~n proceeds) is an agreed-upon amount per loan that does not vary by loan and can only be changed on a quarterly basis. The Defendant shall ensure compliance with these standards is a part of any agreement that provides for a mortgage broker to submit loan applications to the Defendant. To the extent the standards established to satisfy this Paragraph allow mortgage brokers to exercise discretion in the amount of the total broker compensation, mortgage brokers will provide a written explanation for borrower-paid total broker compensation that exceeds 2.5% of the loan amount. Before -funding
2 The terms "overage," "subsidy,'" and "total broker compensation" in the Order follow the definition contained in the June 2012 Guidelines. 3 The term "mortgage broker" in the Order follows the definition contained in 12 C.F.R. § 1026.36(a), and includes both natural persons and organizations.
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Case 3:12-cv-00397-REP Document 15 Filed 09/14/12 Page 5 of 23 PageID# 322
any loan, the Defendant shall ensure it maintains documentation of compliance with the standards established to satisfy this Paragraph.
3. The Defendant shall require, for all loans secured by residential real estate originated in its name, all employees and mortgage brokers to comply with the requirements established in Paragraphs 1-2. The Defendant shall also require an appropriate manager, under the supervision of a designated senior official of the Defendant, to review compliance with these requirements and to ensure that discretionary loan prices do not vary materially by race or national origin without a legitimate nondiscriminatory explanation for such variation. In the event that Defendant receives or pays compensation in excess of what is permitted by the policies referenced in Paragraphs 1-2, an appropriate refund will be provided to the borrower in the form of a cash payment or credit to the borrower's account. All reviews shall be documented, and such documentation shall be retained for the term of the Order.
B. . Monitoring Program 4. The Defendant for the duration of the Order shall maintain no less than its currently existing level of fair lending auditing and monitoring detailed in SunTrust Mortgage's "Fair and Responsible Banking: Mortgage Pricing Regression Analysis (Retail)" and "Fair and Responsible Banking" Mortgage Pricing Regression Analysis (Broker)" procedure documents last reviewed on May 1, 2012 ("the May 2012 Procedures"), as provided to the United States on May 11 and 14,2012. 5. Within 30 days of the Effective Date of the Order, the Defendant shall have in place a monitoring program designed to ensure compliance with the Order. The program shall be designed to monitor, for all loans secured by residential real estate originated in its name, for potential unexplained disparities by a borrower's race or national origin in the price charged for its residential loan products. At a minimum, the Defendant shall monitor APRs, overages,
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Case 3:12-cv-00397-REP Document 15 Filed 09/14/12~Page 6 of 23 PageID# 323 "
subsidies, and total broker compensation. The monitoring shall include, but not be limited to, an analysis designed to detect statistically significant unexplained disparities in the price charged for its residential loan products by race and national origin, with respect to all loans secured by residential real estate originated in the Defendant's name. Such analysis win be conducted at the national level and at a metropolitan statistical area (MSA) level for MSAs where the Defendant annually originates at least 100 loans, including at least 30 loans to non-Hispanic whites and 30 loans to either African-Americans or Hispanics.
6. The Defendant's senior managers shall conduct it quarterly review of the monitoring program. A report on the review shall be presented to the appropriate committee of the Defendant's Board of Directors for approval not later than 75 days after the end of each quarter.
a. In the event that any such review discloses statistically significant at the 95% level disparities at the national level or in any MSA, the Defendant shall attempt to determine the reason(s) for those disparities and shall promptly take corrective action to address significant disparities that were caused by a policy or practice of the Defendant, and not justified by legitimate business need. Corrective action shall include, as warranted, financial remediation for borrowers, modifications to the Defendant's pricing policies and/or monitoring programs as appropriate, and education, discipline or termination of employee(s) or mortgage broker relationship(s). The Defendant shall document all such disparities, determinations, and actions taken and shall provide a
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Case 3:12-cv-00397-REP Document 15 Filed 09/14/12 Page 7 of 23 PageID# 324
summary of the quarterly reviews and any documentation and analysis relating thereto to the United States on a semi-annual basis.4
b. In the event that any such review discloses statistically significant disparities with respect to any particular employee, branch office, or mortgage broker, the Defendant shall require the employee, branch manager, or mortgage broker to explain the non-discriminatory reason(s) for those disparities. If there is no reasonable, non-
discriminatory explanation for the noted disparities, the Defendant shall require the
employee or branch manager to take prompt corrective action to address the disparities, and the Defendant shall take prompt appropriate action with respect to mortgage brokers, up to and including termination of the broker relationship.
If the United States raises any objections to the Defendant's determinations or remedial actions pursuant to this paragraph, the Defendant and the United States shall meet and confer to consider appropriate steps to address the concerns raised by the United States' review. If the parties are unable to come to an agreement regarding such objections, any party may bring the
dispute to the Court for resolution. To resolve the dispute, the Court shall review whether the Defendant has followed "Step 1," "Step 2," and "Step 3" of the May 2~12 Procedures, and, if the
4 All material required by the Order to be sent to the United States shall be sent by commercial overnight delivery service addressed as follows: Chief, Housing and Civil Enforcement Section, Civil Rights Division, U.S. Department of Justice, 1800 G Street NW, Suite 7002, Washington, DC 20006, Attn: DJ 188-79-19, or by facsimile to 202-514-1116. The Defendant may redact .portions based on an assertion of attorney work product or attorney-client privilege from any materials required by the Order to be sent to the United States or to be subject to review by the United States, or, upon notice to the United States, it may withhold materials based on an assertion of attorney-client privilege applying to an entire document. Ifthe United States raises any objections to the Defendant's claim of privilege, the Defendant and the United States shall meet and confer to resolve the dispute. If the parties are unable to come to a resolution, the United States may ask the Court to determine whether the material is protected from disclosure by attorney work product or attorney-client privilege recognized under any applicable federal or state law.
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Case 3:12-cv-00397-REP Document 15 Filed 09/14/12 Page 8 of 23 PageID# 325
Court determines that the Defendant has not done so, require the Defendant to comply with each step that it did not follow.
7. During the duration of the Order, the Defendant shall maintain a complaint resolution program to address consumer complaints alleging discrimination regarding pricing of loans secured by residential real estate originated in the Defendant's name. The Defendant may satisfy this requirement through a program administered by its own employees. This program will not review complaints concerning the Settlement Fund provided by Paragraphs 12-24. Documentation regarding such complaint resolution program, including documentation of individual complaints and resolutions, if any, shall be made available to the United States through the semi-annual reports referenced in Paragraph 27. There is no requirement under the Order that any complaint necessarily be resolved for or against the Defendant or that any particular form or amount of relief be provided to any complainant, and the Parties shall not bring disputes concerning the resolution of individual complaints to the Court.
C. Equal Credit Opportunity Training Program 8. Within 90 days of the Effective Date of the Order, the Defendant shall provide access to a copy of the Order and the policies referenced therein to its management officials and employees who participate in taking applications for, originating, or pricing loans secured by residential real estate, including employees who have significant contact with or oversight of mortgage brokers. The Defendant shall provide access to a copy of the Order and the policies referenced therein to each new management official or employee whose responsibilities include those set forth in the preceding sentence within 30 days of beginning his or her employment in that position.
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Case 3:12-cv-00397-REP Document 15 Filed 09/14/12 Page 9 of 23 PageID# 326
9. Within 150 days of the Effective Date of the Order, and annually thereafter for the duration of the Order, the Defendant shall provide equal credit opportunity training to its management officials and employees who participate in taking applications for, originating, or pricing loans secured by residential real estate, including employees who have significant contact with or oversight of mortgage brokers. The Defendant shall provide equal credit opportunity training to each new management official or employee whose responsibilities include those set forth in the preceding sentence within 90 days of beginning his or her employment in that position.
10. During the equal credit opportunity training, the Defendant shall provide to each participant training on the tenns ofthe Order, the policies referenced therein, the requirements of the FHA, the ECOA, and his or her responsibilities under each. The content of the training program required by this Paragraph shall be approved in advance by the United States. Any expenses associated with this training program shall be borne by the Defendant. .At the conclusion of the training program, the Defendant wiJI require each employee to successfully complete an assessment which demonstrates that the employee was provided access to a copy of the Order and the policies referenced therein, understands his or her legal responsibility not to discriminate, and has completed the equal credit opportunity training.
11. .The Defendant shall offer all mortgage brokers who submit applications to the Defendant for loans secured by residential real estate the opportunity to undergo fair lending training similar to the training described in Paragraph 10. The Defendant shall retain for the duration of the Order documentation of any training conducted or requests for training made pursuant to this Paragraph, and make such documentation available to the United States upon request.
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Case 3:12-cv-00397-REP Document 15 Filed 09/14/12 Page 10 of 23 PageID# 327
IV. SETTLEMENT FUND 12. The Defendant shall deposit in an interest-bearing escrow account the total sum of $21 million to compensate for alleged monetary damages suffered as a result of the alleged violations of the FHA and the ECOA (the "Settlement Fund"). The Defendant shall provide written verification of the deposit to the United States within 5 days of the Effective Date of the Order. Any interest that accrues shall become part of the Settlement Fund and be utilized and disposed of as set forth herein. 13. The United States provided to the Defendant a list of 28,984 loans originated to African-American and Hispanic borrowers affected by the discrimination alleged in the Complaint, and the amount of loan fees and costs at issue for each listed loan. No individual may request the Court review the identification of loans. The Defendant will provide the name, property address, mailing address, and Social Security number for each borrower on each listed loan. Such information and data shall be used by the United States only for the la'Y enforcement purposes of implementing this Order. Within 90 days of the Effective Date of the Order, the Defendant shall supply, to the extent that it is within the control of the Defendant, the Defendant's parent, or any entity owned by the Defendant's parent, the requested data. To the extent that the requested data is not within the control of those parties, the Defendant shall, within 90 days of the Effective Date ofthe Order, supply any data in the control of those parties that identifies other parties that may have that the information. The United States shall, within 10 days of providing notice, be allowed access to mortgage loan files and borrower contact information contained in servicing records of the Defendant, the. Defendant's parent, or any entity owned by the Defendant's parent for loans the Defendant originated between 2005 and 2009 to verify the accuracy of the data provided and to otherwise assist in locating borrowers who will receive payments from the Settlement Fund.
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Case 3:12-cv-00397-REP Document 15 Filed 09/14/12 Page 11 of 23 PageID# 328
· 14. Rust Consulting Inc. shall serve as Settlement Administrator ("Administrator") to
conduct the activities set forth in Paragraphs 15-20. The Defendant shall bear all costs and
expenses of the Administrator, and the Defendant's contract with the Administrator shall require
the Administrator to comply fully with the provisions of the Order as applicable to the Administrator.s The Administrator's contract shall require the Administrator to work
cooperatively with the United States in the conduct of its activities, including providing reports
at least monthly to the United States detailing its activities since its last report. The Defendant
shall allow the Administrator access to mortgage loan files and borrower contact information
contained in servicing records of the Defendant, the Defendant's parent, or any entity owned by
the Defendant's parent for loans the Defendant originated between 2005 and 2009 for the
purposes of accomplishing its duties under the Order. The Administrator's contract shall require
the Administrator to comply with all confidentiality and privacy restrictions applicable to the
party who supplied the information and data to the Administrator. Consistent with Paragraphs
15 and 17, the Administrator will neither determine who is an allegedly aggrieved person nor determine the amount of damage to be received by any allegedly aggrieved person.
S Defendant shall provide the United States an opportunity (l) to review a draft of the contract it proposes to enter into with the Administrator and (2) to request changes to the contract suffi'cient to ensure that the contract requires the Administrator's full compliance with the provisions of the Order as applicable to the Administrator. In the event the United States has reason to believe that the contract does not so provide, or that the Administrator is not materially complying with the terms of its contract with the Defendant, the United States and the Defendant shall meet and confer for the purpose of mutually agreeing upon a modified contract or a course of action to effect the Administrator's material compliance with its contract with the Defendant. In the event that the United States and the Defendant are unable to agree upon the terms of a contract or a course of action to effect the Administrator's material compliance with its contract with the Defendant, the parties may present the matter to the Court. The Court shall determine whether the contract is sufficient to require the Administrator's full compliance with the provisions of the Order as applicable to the Administrator, or that the Administrator is materially complying with the terms of its contract with the Defendant, and it shaH direct the Defendant to remedy promptly any deficiencies it finds.
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Case 3:12-cv-00397-REP Document 15 Filed 09/14/12 Page 12 of 23 PageID# 329
15. Within 90 days of receipt of all the data required to be provided by Paragraph 13, the United States shall provide the Defendant and the Administrator with the amount the borrowers (hereinafter "allegedly aggrieved persons") will receive from the Settlement Fund for each of the 28,984 loans affected by the discrimination al1eged in the Complaint and included on the list provided to the Defendant pursuant to Paragraph 13, if all allegedly aggrieved persons choose to participate. The United States shall base these amounts on the loan fees and costs provided to the Defendant pursuant to Paragraph 13. No individual may request the Court or the Administrator review the identification of allegedly aggrieved persons or the amount to be received. The Order does not affect the legal rights of any individual not included on the list of allegedly aggrieved persons.
16. The Administrator's contract shall require the Administrator to adopt methods regularly used by companies that administer litigation and government enforcement settlement funds to locate each identified allegedly aggrieved person, to inform each identified allegedly aggrieved person of his or her right to receive a payment from the Settlement Fund no smaller than the amount calculated by the United States pursuant to Paragraph 15, and to confirm his or her identity and willingness to release his or her individual discrimination claims in order to receive a payment fonn the Settlement Fund. The Administrator's contract shall require the Administrator to complete this responsibility within a period of 6 months from the date the United States provides the list described in Paragraph 15, subject to an extension of time as provided by Paragraphs 21 and 30. The Administrator's contract shal1 require the Administrator, as part of its operation, to establish cost-free means for allegedly aggrieved persons to contact it, such as email and a toll-free telephone number.
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Case 3:12-cv-00397-REP Document 15 Filed 09/14/12 Page 13 of 23 PageID# 330
17. For each allegedly aggrieved person who confinns his or her identity and willingness to release individual discrimination claims pursuant to Paragraph 16, the United States shall specify the final amount each such person shall receive from the Settlement Fund no later than 120 days after the Administrator's deadline for locating aggrieved persons in Paragraph 16 has passed. The United States shall adjust these final payment amounts from the payment amounts calculated pursuant to Paragraph 15 to distribute funds originally allocated to allegedly aggrieved persons who did not confirm, pursuant to Paragraph 16, their identity and willingness to release individual discrimination claims. The United States shall provide the final compensation list to the Administrator. No individual may request a review by the Court or the Administrator of the final payment amounts. The parties agree that the total amount of the Settlement Fund shall not be altered based on the number of allegedly aggrieved persons who confirm their identity and willingness to release individual discrimination claims pursuant to Paragraph 16.
18. The Administrator's contract shall require the Administrator to send releases, including the language set forth in Appendix A, to aIlegedly aggrieved persons (hereafter, "Releases"). Each Release shall list the final payment amount the United States has allocated to the allegedly aggrieved individual from the Settlement Fund, as provided by Paragraph 17. Any allegedly aggrieved person may decline all benefits from the Order, including a payment from the Settlement Fund, by not returning the Release. The Order does not affect the legal rights of any allegedly aggrieved person who does not return the Release. The parties agree that the amount of the Settlement Fund shall not be altered based on the number of allegedly aggrieved persons who return a Release.
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Case 3:12-cv-00397-REP Document 15 Filed 09/14/12 Page 14 of 23 PageID# 331
19. After receipt of executed releases, the Administrator's contract shall require the Administrator promptly to deliver payments to those persons in amounts determined by the United States as described in Paragraph 17.
20. The Administrator's contract shall require the Administrator to set forth deadlines, subject to approval of the United States, so that the compensation is distributed and checks are presented for payment or become void prior to the date that is 24 lTIonths from the date the Administrator begins to locate allegedly aggrieved persons pursuant to Paragraph 16.
21. Payments from the Settlement Fund to allegedly aggrieved persons shall be subject to the following conditions, provided that the details in administration of the Settlement Fund set forth in Paragraphs 13-20, can be modified by agreement of the parties and without further Court approval:
(a) No allegedly aggrieved person shall be paid any amount from the Settlement Fund until he or she has executed and delivered to the Defendant a Release, including the language set forth in Appendix A; and
(b) The total amount paid by the Defendant collectively to the allegedly aggrieved persons shall not exceed the amount .of the Settlement Fund, including accrued interest.
22. All money not distributed to allegedly aggrieved persons from the Settlement Fund, including accrued interest, within 24 months from the date the Administrator begins to locate allegedly aggrieved persons pursuant to Paragraph 16 shall be distributed to at least two organizations that provide services including credit and housing counseling (including assistance in obtaining loan modification and preventing foreclosure), legal representation of borrowers seeking to obtain a loan modification or to prevent foreclosure, financial literacy, and other related programs targeted at African-American and Hispanic potential and former homeowners
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Case 3:12-cv-00397-REP Document 15 Filed 09/14/12 Page 15 of 23 PageID# 332
in communities where the Complaint alleges significant discrimination occurred against AfricanAmerican and Hispanic borrowers. The Defendant shall identify the organizations to receive s,!ch funds, and it shall propose to the United States the amount of funds each organization shall receive. Recipients of such funds must not be related to the Defendant, the Defendant's parent, or any entity owned by the Defendant's parent. The Defendant will consult with and obtain the non-objection of the United States in selecting recipients of these funds and the amount to be distributed to each.
23. The parties shall obtain the Court's approval for the organizations to receive funds and the amount to be distributed to each prior to distribution provided by Paragraph 22. The parties shall provide the Court with infonnation regarding how the proposed organizations meet the requirements set forth in Paragraph 22. The Defendant shall require each recipient to submit to the Court, the Defendant, and the United States a report detailing that funds are utilized for the purposes indentified in Paragraph 22 within one year after the funds are distributed. For any recipient that does not provide such a report, the Defendant shall require that the funds be returned to it for redistribution to the other organization(s) approved to receive funds.
24. The Defendant shall not be entitled a set-off, or any other reduction, of the amount of payments to aggrieved persons because of any debts owed by the identified persons. The Defendant also shall not refu~e to make a payment based on a release of legal claims or loan modification previously signed by any aggrieved persons.
V. EVALUATING AND MONITORING COMPLIANCE 25. For the duration of the Order, the Defendant shall retain all records relating to its obligations hereunder as well as its compliance activities as set forth herein. The United States shall have the right to review and copy such records upon request, including loan files and electronic data for loans secured by residential real estate made during the duration of the Order.
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Case 3:12-cv-00397-REP Document 15 Filed 09/14/12 Page 16 of 23 PageID# 333
26. The Defendant shall provide to the United States the data on its lending that is submitted to the Federal Financial Institutions Examination Council (FFIEC) pursuant to the Home Mortgage Disclosure Act and the Community Reinvestment Act. The data will be provided in the same format in which it is presented to the FFIEC, within 3.0 days of its submission to the FFIEC each year, for the duration of the Order, including the record layout.
27. In addition to the submission of any other plans or reports specified in the Order, the Defendant shaH submit semi-annual reports to the United States on its progress in completing the requirements of the Order. Each such report shall provide a complete account of the Defendant's actions to comply with each requirement of the Order during the previous 6 months, an objective assessment of the extent to which each quantifiable obligation was met, an explanation ofwhy any particular component fell short of meeting its goal for the previous 6 months, and any recommendations for additional actions to achieve the goals of the Order. Each such report shall detail any changes made to the June 2012 Guidelines or the May 2012 Procedures during the previous 6 months. The Defendant shall submit its first report no later than 180 days after the Effective Date of the Order, and every 180 days thereafter for so long as the Order is in effect. In addition, if applicable, the Defendant .shall attach to the semi-annual reports representative copies of training materials disseminated pursuant to the Order.
VI. ADMINISTRATION 28. Unless otherwise stated herein, the remedial provisions of the Order shall be implemented within thirty (30) days of the Effective Date of the Order and shall continue throughout its term. The Effective Date of the Order shall be the date on which it is approved and entered by the Court.
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Case 3:12-cv-00397-REP Document 15 Filed 09/14/12 Page 17 of 23 PageID# 334
29. The Order shaH terminate 3 months after the submission of the Defendant's sixth semi-annual report due under Paragraph 27 to the United States, except that if all the actions required by Paragraphs 12 through 24 have not been completed, Paragraphs 12 to 24 and this section will continue in effect for an additional six months. Notwithstanding the above, the Order may be extended further upon motion of the United States to the Court, for good cause shown.
30. Any time limits for performance fixed by the Order may be extended by mutual written agreement of the parties. Except as provided by Paragraph 21, other modifications to the Order may be made only upon approval of the Court, upon motion by either party. The parties recognize that there may be changes in relevant and material factual circumstances during the duration of the Order which may impact the accomplishment of its goals. The parties agree to work cooperatively to discuss and attempt to agree upon any proposed modifications to the Order resulting therefrom.
31. The Order shall be binding on the Defendant, including all its officers, employees, agents, assignees, and successors in interest, and all those in active concert or participation with any of them. The Order shall consider loans originated by a joint venture operated by the Defendant, which are also funded by the Defendant, to be loans originated by employees of the Defendant. In the 'event the Defendant seeks to transfer or assign all or part of its operations, and the successor or assign intends on carrying on the same or similar use, as a condition of sale, the Defendant shall obtain the written accession of the successor or assign to any obligations remaining under the Order for its remaining term.
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Case 3:12-cv-00397-REP Document 15 Filed 09/14/12 Page 18 of 23 PageID# 335
32. Nothing in the Order shall excuse the Defendant's compliance with any currently or subsequently effective provision of law or order of a regulator with authority over the Defendant that imposes additional obligations on the Defendant.
33. The parties agree that, as of the date of entry of the Order, litigation is not "reasonably foreseeable" concerning the matters described in the Order. To the extent that either party previously implemented a litigation hold to preserve documents, electronically stored infonnation, or things related to the matters described in the Order, the party is no longer required to maintain such a litigation hold.
34. In the event that any disputes arise about the interpretation of or compliance with the terms of the Order, the parties shall endeavor in good faith to resolve any such dispute between themselves before bringing it to the Court for resolution. If the United States believes that the Defendant has violated any provision of the Order, it will provide the Defendant written notice thereof and allow 30 days to resolve the alleged violation before presenting the matter to the Court. In the event of either a failure by the, Defendant to perform in a timely manner any act required by the Order or an act by the Defendant in violation of any provision hereof, the United States may move the Court to impose any remedy authorized by law or equity.
35. The Defendant's compliance with the terms ofthe Order shall fully and fmally resolve all claims by the United States of discrimination, including under the FHA and ECOA, that are raised in the Complaint's allegations of a pattern or practice, in loans originated between January 1, 2005 and December 31, 2009 by the Defendant, of discrimination against AfricanAmerican and Hispanic borrowers based on racial and national origin disparities in loan prices, including all claims for equitable relief and monetary damages and penalties arising from those claims, as well as any claims under any other legal theory based on the same allegations of
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Case 3:12-cv-00397~-R\EP Document 15 Filed 09/14/12 Page 19 of 23 PageID# 336

discriminatory conduct addressed in the Complaint. The Order does not release claims for practices not addressed in the Complaint's allegations, including claims that may be held or are currently under investigation by any federal agency. The Order does not release any claims not related to discrimination under any statute.
36. Each party to the Order shall bear its own costs and attorneys' fees associated with this litigation.
37. The Order is enforceable only by the parties. No person or entity is intended to be a third party beneficiary of the provisions of the Order for purposes of any civil, criminal, or administrative action, and accordingly, no person or entity may assert a claim or right as a beneficiary or protected class under the Order.
38. The Court shall retain jurisdiction for the duration of the Order to enforce the terms of the Order, after which time the case shall be dismissed with prejudice. Pursuant to the provisions of Paragraphs 13, 15, 17, and 37, the Court will not resolve disputes over the identification of allegedly aggrieved persons or the amount of compensation allocated to each such person.
SO ORDERED, this Jt..rr;Of~2012.

/s/

~

UNITED STATES DISTRICT JUDGE ROBERT E. PAYNE

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Case 3:12-cv-00397-REP Document 15 Filed 09/14/12 Page 20 of 23 PageID# 337

The undersigned hereby apply for and consent to the entry of the Order: For Plaintiff United States of America:

NEIL H. MACBRIDE United States Attorney

THOMAS E. PEREZ Assistant Attorney General Civil Rights Division STEVEN H. ROSENBAUM Chief Civil Rights Division Housing and Civil Enforcement Section JON M. SEWARD Deputy Chief Civil Rights Division Housing and Civil Enforcement Section

ROBERT P. MCINTOSH Virginia Bar Number 66113 Assistant United States Attorney 600 E. Main Street, Suite 1800 Richmond, Virginia 23219 Email: Robert.McIntosh@usdoj.gov Phone: 804-819-5400 Fax: 804-819-7417
For Defendant SunTrust Mortgage, Inc.:
ANDREW L. SANDLER KIRK D. JENSEN LIANA R. PRIETO

DANIEL P. MOSTELLER Trial Attorney United States Department of Justice Civil Rights Division Housing and Civil Enforcement Section 950 Pennsylvania Ave., N.W. - NWB Washington, D.C. 20530 Email: Daniel.Mosteller@usdoj.gov Phone: 202-514-4713 Fax: 202-514-1116

CAITLIN M. KASMAR Virginia Bar Number 68298 BuckleySandler LLP 1250 24th Street NW, Suite 700 Washington, DC 20037 Email: Andrew.Sandler@buckleysandler.com Phone: 202-349-8000 Fax: 202-349-8080

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Case 3:12-cv-00397-REP Document 15 Filed 09/14/12 Page 21 of 23 PageID# 338
.-

The undersigned hereby apply for and consent to the entry of the Order: For Plaintiff United States of America:

NEIL H. MACBRIDE United States Attorney

THOMAS E. PEREZ Assistant Attorney General Civil Rights Division STEVEN H. ROSENBAUM Chief Civil Rights Division Housing and Civil Enforcement Section JON M. SEWARD Deputy Chief Civil Rights Division Housing and Civil Enforcement Section

ROBERT P. MCINTOSH
Virginia Bar Number 66113
Assistant United States Attorney
600 E. Main Street, Suite 1800 Richmond, Virginia 23219
Email: Robert.McIntosh@usdoj .gov
Phone: 804-819-5400 Fax: 804-819-7417
For Defendant SunTrust Mortgage, Inc.:
ANDREW L. SANDLER KIRK D. JENSEN LIANA R. PRIETO
CAI~S~~~
Virginia Bar Number 68298
BuckleySandler LLP
1250 24th Street NW, Suite 700 Washington, DC 20037
Email: Andrew.Sandler@buckleysandler.com
Phone: 202-349-8000 Fax: 202-349-8080

DANIEL P. MOSTELLER Trial Attorney United States Department ofJustice Civil Rights Division
Housing and Civil Enforcement Section
950 Pennsylvania Ave., N.W. - NWB Washington, D.C. 20530
Email: DanieI.Mosteller@usdoj.gov
Phone: 202-514-4713 Fax: 202-514-1116

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Case 3:12-cv-00397-REP Document 15 Filed 09/14/12 Page 22 of 23 PageID# 339

APPENDIX A

Release

In consideration for the parties' agreement to the terms of the Consent Order entered in

United States v. SunTrust Mortgage, Inc., (E.D. Va.), and the Defendant's payment to me of

$

, pursuant to the Consent Order, I hereby release and forever discharge all claims,

accruing prior to the entry of the Consent Order, related to the allegations of housing and credit

discrimination in the origination of loans secured by residential real estate at issue in the

litigation referenced above, that I may have against the Defendant, all related entities, parents,

predecessors, successors, subsidiaries, and affiliates, and all of their past and present directors,

officers, agents, managers, supervisors, shareholders, and employees and their heirs, executors,

administrators, successors, or assigns.

Executed this _ day of _ _ _, __.

Signature

Print Name

Address

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CMCIEaCsFe -3v:1ae2d-cv-00397-REP Document 15 Filed 09/14/12 Page 23 of 23 PagePIaDg#e 134o0f 1

Notices
3:12-cv-00397-REP United States Of America v. SunTrust Mortgage, Inc.
u.s. District Court

Eastern District of Virginia -

Notice of Electronic Filing

The following transaction was entered by McIntosh, Robert on 7110/2012 at 3:03 PM EDT and filed on

7/10/2012

Case Name:

United States Of America v. SunTrust Mortgage, Inc.

Case Number:

3: 12-cv-00397-REP

Filer:

United States Of America

Document Number: 14

Docket Text:
NOTICE by United States Of America re [12] Motion Hearing, "Unopposed Motion for Entry of Revised Consent Order and Brief in Support" with proposed Consent Order attached
(original paper copy with signatures to be lodged in Clerk's Office) (Attachments: # (1) Proposed Order)(Mclntosh, Robert)

3:12-cv-00397-REP Notice has been electronically mailed to:
Andrew L. Sandler asandler@buckleysandler.com
Caitlin Marie Kasmar ckasmar@buckleysandler.com
Daniel Paul Mosteller daniel.mosteller@usdoj.gov
Liana R. Prieto lprieto@buckleysandler.com
Robert P. McIntosh Robert.McIntosh@usdoj.gov, USAVAE.RIC.ECF.CIVIL@usdoj.gov
3:12-cv-00397-REP Notice has been delivered by other means to:
The following document(s) are associated with this transaction:
Document description:Main Document Original filename:nla Electronic document Stamp: [STAMP dcecfStamp_ID= 1091796605 [Date=711 0/2012] [FileNumber=40530 19-0 ] [llbbffcOOe741fb2dlb20b7e60161202014a9ff4da4ac6f5e04e42c8c14geft1482 93f20aa587280 172c7a2fl3af692c83b36e7806ed 11492 Ige8976cdOcbafb]] Document description:Proposed Order Original filename:nla Electronic document Stamp: [STAMP dcecfStamp_ID=1091796605 [Date=7/10/2012] [FileNumber=4053019-1 ] [387d5faa6fe19533bbd4fbdd4f644fb2f382a4d30c8e4c97b8ff2cfb45e6eca9ba6 85796a02704ce37159d02c4e94a92cb4f23bc36ddbb9274ad90b93fa3244c]]

https:llecf.vaed.uscourts.gov/cgi-binIDispatch.pl?832600500551689

7110/2012

 
 Case 3:12-cv-00397-REP Document 24 Filed 11/04/16 Page 1 of 5 PageID# 406

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF VIRGINIA
RICHMOND DIVISION
UNITED STATES OF AMERICA, Plaintiff,

KOV - 4 2016
CLERK, U.S. DISTRICT COURT RICHMOND. VA

V.

No. 3:12-cv-00397-REP

SUNTRUST MORTGAGE, INC., Defendant.

CONSENT ORDER OF DISMISSAL WITH PREJUDICE
1. On September 14,2012, this Court entered a Consent Order between Plaintiff United States and Defendant SunTrust Mortgage, Inc. The Consent Order resolved all claims set forth in the United States' Complaint against the Defendant in this matter, and provided that the case shall be dismissed with prejudice after completion of the Order.
2. By Order of the Court entered on November 16, 2015 (Docket No. 20), the Court ordered "that the parties shall submit a Consent Order of Dismissal With Prejudice not later than October 31, 2016, and, to that end, counsel shall follow up with distribution to expedite the filing of reports required by paragraph 22 of the Disbursement Order."
3. The parties have now filed a Joint Motion for Entry of Consent Order of Dismissal with Prejudice, to which is attached as Exhibit A certifications from 15 organizations approved by the Court pursuant to paragraphs 4-20 of the Disbursement Order (Docket No. 17) who received a portion of surplus settlement funds remaining after aggrieved persons had been compensated pursuant to paragraph 22 of the Consent Order (Docket No. 15). Thirteen organizations report that they have spent "the received funds for one or more of the following purposes: credit and housing counseling (including assistance in obtaining loan modification and

Case 3:12-cv-00397-REP Document 24 Filed 11/04/16 Page 2 of 5 PageID# 407
preventing foreclosure), legal representation of borrowers seeking to obtain a loan modification or to prevent foreclosure, financial literacy, or other related programs targeted at AfncanAmerican and Hispanic potential and former homeowners in communities where the Complaint in United States v. SunTrust Mortgage. Inc. alleged significant discrimination occurred against African-American and Hispanic borrowers." Two remaining organizations. The Up Center, and Tallahassee Lenders' Consortium Inc., report that they have spent $88,978.50 out of $100,000.00, and $30,000.00 out of $50,000.00, respectively, that was distributed to them. The Up Center and Tallahassee Lenders' Consortium, Inc., further certify that they "will utilize the remaining... funds ... for one or more of the purposes above by" November 30, 2016; and January 15,2017, respectively. Alternatively, if they have not "utilized the remaining $11,021.50 [or $20,000.00] of the funds received for one or more of the purposes above by November 30,2016, [or January 15, 2017, they] will return all unutilized money to SunTrust."
4. In light of the foregoing, the Court determines that all terms of the Consent Order have been substantially completed, and it is therefore:
ORDERED that the Defendant will require The Up Center and Tallahassee Lenders' Consortium Inc. to return any funds they have not spent by January 15, 2017 to provide credit and housing counseling (including assistance in obtaining loan modification and preventmg foreclosure), legal representation of borrowers seeking to obtain a loan modification or to prevent foreclosure, financial literacy, or other related programs targeted at AfricanAmerican and Hispanic potential and former homeowners; it is further
—2—

Case 3:12-cv-00397-REP Document 24 Filed 11/04/16 Page 3 of 5 PageID# 408

ORDERED that the Defendant will redistribute any returned funds to one or more of the other 13 organizations named in the Disbursement Orderentered on September 29, 2015 to be spent toward the purposes specified in that Order; it is further
ORDERED that this case is DISMISSED WITH PREJUDICE.
LET THE CLERK serve a copy of this Consent Order of Dismissal with Prejudice upon counsel of record by ECF transmission.
It is so ORDERED.

Richmond, Virginia
Date: November _2_, 2016
WE ASK FOR THIS:
DANA J. BOENTE
Unit^ States Attorney

/s/
ROBERT E. PAYNE
Senior United States District Judge

Robert P. Mclntosh, VSB No. 66113 Assistant United States Attorney 919 East Main Street, Suite 1900 Richmond, VA 23219
Telephone: (804) 819-7404 Facsimile: (804) 819-7417 Email: Robert.McIntosh@usdoj.gov
VANITA GUPTA
Principal Deputy Assistant Attorney General Civil Rights Division
SAMEENA SHINA MAJEED, Chief Civil Rights Division
Housing and Civil Enforcement Section

—3—

Case 3:12-cv-00397-REP Document 24 Filed 11/04/16 Page 4 of 5 PageID# 409
DANIEL P. MOSTELLER
Acting Special Litigation Counsel United States Department of Justice Civil Rights Division Housing and Civil Enforcement Section 950 Pennsylvania Ave., N.W. - NWB Washington, D.C. 20530 Email: Daniel.Mosteller@usdoj.gov
Phone: 202-514-4713 Fax: 202-514-1116
Counselfor the United States
SEEN, AGREED, AND CONSENTED TO:
ANDREW L. SANDLER MARSHALL T. BELL
CAITLIN M. KASMAR
Virginia Bar Number 68298 BuckleySandler LLP
1250 24*^ Street NW, Suite 700
Washington, DC 20037 Email: ckasmar@buckleysandler.com
Phone: 202-349-8000 Fax: 202-349-8080
Counsel for SunTrust Mortgage, Inc.
•A—

Case 3:12-cv-00397-REP Document 24 Filed 11/04/16 Page 5 of 5 PageID# 410
DANIEL P. MOSTELLER
Acting Special Litigation Counsel United States Department of Justice Civil Rights Division Housing and Civil Enforcement Section 950 Pennsylvania Ave., N.W. - NWB Washington, D.C. 20530 Email: Daniel.Mosteller@usdoj.gov
Phone: 202-514-4713 Fax: 202-514-1116
Counselfor the United States
SEEN, AGREED, AND CONSENTED TO:
ANDREW L. SANDLER MARSHALL T. BELL
i iAA/ld.
CAITLIN M. KASMAR
Virginia Bar Number 68298 BuckleySandler LLP
1250 24"" Street NW, Suite 700
Washington, DC 20037 Email: ckasmar@buckleysandler.com
Phone: 202-349-8000 Fax: 202-349-8080
Counselfor SunTrust Mortgage, Inc.

 
 Department of Justice Office of Public Affairs FOR IMMEDIATE RELEASE Thursday, May 31, 2012
Justice Department Reaches $21 Million Settlement to Resolve Allegations of Lending Discrimination by Suntrust Mortgage
Borrowers Were Charged Higher Fees Based on Their Race or National Origin in 2005-2009 Before the Company Implemented New Policies
WASHINGTON – SunTrust Mortgage Inc., the mortgage lending subsidiary of the nation’s 11th-largest commercial bank, has agreed to pay $21 million to resolve a lawsuit by the Department of Justice that it 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, was filed today in federal court in Richmond, Va., where SunTrust Mortgage is headquartered. The settlement comes after a two-and-a-half-year investigation by the 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 cooperated fully with the Justice Department’s investigation into its lending practices and agreed to settle this matter without contested litigation.
“Today’s settlement demonstrates that the Department of Justice takes seriously its responsibility to investigate mortgage lending practices during the mortgage boom years and, when the evidence shows the law was broken, to obtain compensation for victims of illegal conduct,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We will, however, work constructively with responsible lenders like SunTrust Mortgage that are willing to take the necessary steps to ensure equal credit opportunity for all borrowers. We commend SunTrust Mortgage for taking action to implement strong fair lending policies even before they knew the full results of our investigation.”
The settlement was filed in conjunction with the department’s complaint that alleges SunTrust Mortgage 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. Specifically, the allegations involve loans made to African-American borrowers between 2005 and 2008 through the more than 200 retail offices directly operated by SunTrust Mortgage in the Southeastern and MidAtlantic portions of the United States. The allegations also involve loans made to African-American and Hispanic borrowers between 2005 and 2009 through SunTrust Mortgage’s national network of mortgage brokers.
“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.”
SunTrust Mortgage’s business practice during the time periods covered by the lawsuit allowed its loan

officers and mortgage brokers to vary a loan’s interest rate and other fees from the price it set based on the borrower’s objective credit-related factors. This subjective and unguided pricing discretion resulted in African-American and Hispanic borrowers paying more.
Prior to the settlement, SunTrust Mortgage had implemented policies that substantially reduced the discretion of its loan officers and mortgage brokers to vary a loan’s interest rate and other fees from the price it set based on the borrower’s objective credit-related factors, and that required the reasons for variations to be documented and reviewed by a supervisor. Those policies, operating in concert with rules imposed by the Federal Reserve in April 2011 and incorporated into the settlement, restrict compensating loan officers and mortgage brokers based on the terms or conditions of a particular loan. Today’s settlement requires SunTrust Mortgage to keep its improved policies in place for at least the next three years, as well as continuing to monitor its lending for signs of discrimination and providing monitoring reports to the United States.
The department’s investigation into SunTrust Mortgage’s lending practices began after a referral by the Board of Governors of the Federal Reserve to the Justice Department’s Civil Rights Division in December 2009 for potential patterns or practices of discrimination. SunTrust Mortgage’s parent company, Atlanta-based SunTrust Bank, is a member of the Federal Reserve System, and one of the nation’s largest regional banks with $178 billion in assets and more than 1,600 branches in seven states and the District of Columbia.
“Racial or other illegal discrimination has no place in our credit markets,” said Federal Reserve Board Governor Elizabeth A. Duke. “We are pleased that this settlement is designed to ensure fair access to credit.”
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF). President Obama established the interagency FFETF to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov.
A copy of the complaint and proposed settlement order, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department website at www.justice.gov/fairhousing.
The proceeds of the settlement will be used to compensate the victims of SunTrust Mortgage’s discrimination, who were located in 34 states and the District of Columbia when the discrimination occurred. The proposed settlement provides for an independent administrator to contact and distribute payments of compensation at no cost to borrowers whom the Justice Department identifies as victims of SunTrust Mortgage’s discrimination. Borrowers who are eligible for compensation from the settlement will be contacted by the administrator. The department will make a public announcement and post contact information on its website once the administrator begins contacting victims. Individuals who believe that they may have been victims of lending discrimination by SunTrust Mortgage and have questions about the settlement may email the department at suntrust.settlement@usdoj.gov.

 
 Case: 3:12-cv-397 As of: 11/11/2017 07:55 PM EST 1 of 4
U.S. District Court Eastern District of Virginia − (Richmond) CIVIL DOCKET FOR CASE #: 3:12−cv−00397−REP

CLOSED

United States Of America v. SunTrust Mortgage, Inc. Assigned to: District Judge Robert E. Payne Cause: 15:1691 Equal Credit Opportunity Act
Plaintiff

Date Filed: 05/31/2012 Date Terminated: 11/04/2016 Jury Demand: None Nature of Suit: 443 Civil Rights: Accommodations Jurisdiction: U.S. Government Plaintiff

United States Of America

represented by Robert P. McIntosh United States Attorney's Office SunTrust Building 919 East Main Street Suite 1900 Richmond, VA 23219 (804) 819−5400 Email: Robert.McIntosh@usdoj.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED

Daniel Paul Mosteller U.S. Department of Justice Civil Rights Division Housing and Civil Enforcement Section 950 Pennsylvania NW−NWB Washington, DC 20530 **NA** (202) 514−4713 Fax: (202) 514−1116 Email: daniel.mosteller@usdoj.gov PRO HAC VICE ATTORNEY TO BE NOTICED

Defendant SunTrust Mortgage, Inc.

represented by Caitlin Marie Kasmar Buckley Sandler LLP 1250 24th St, NW Suite 700 Washington, DC 20037 202−349−8000 Fax: (202) 349−8080 Email: ckasmar@buckleysandler.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Andrew L. Sandler Buckley Sandler LLP 1250 24th St, NW Ste 700 Washington, DC 20037 **NA** (202) 349−8000 Fax: (202) 349−8080 Email: asandler@buckleysandler.com ATTORNEY TO BE NOTICED

Liana R. Prieto Buckley Sandler LLP 1250 24th St, NW

Case: 3:12-cv-397 As of: 11/11/2017 07:55 PM EST 2 of 4
Ste 700 Washington, DC 20037 **NA** (202) 349−8000 Fax: (202) 349−8080 Email: lprieto@buckleysandler.com ATTORNEY TO BE NOTICED

Date Filed 05/31/2012 05/31/2012 05/31/2012 06/05/2012 06/08/2012 06/11/2012
06/12/2012 06/14/2012 06/14/2012 06/19/2012 06/19/2012 06/25/2012

# Docket Text
1 COMPLAINT against SunTrust Mortgage, Inc. filed by United States Of America(Attachments: # 1 Exhibit A, # 2 Civil Cover Sheet)(lsal) (Entered: 05/31/2012)
2 MOTION and Memorandum In Support for Entry of Consent Order by United States Of America (Attachments: # 1 Consent Order)(lsal) (Entered: 05/31/2012)
3 Motion for Attorney Daniel Paul Mosteller to appear Pro Hac Vice as to United States Of America; no filing fee required; (lsal) (Entered: 05/31/2012)
4 So Ordered 3 Motion for Attorney Daniel Paul Mosteller to appear Pro Hac Vice as to United States Of America. Signed by District Judge John A. Gibney, Jr on 6/5/12. (lsal) (Entered: 06/05/2012)
Set/Reset Hearings: Hearing set for 6/26/2012 at 11:00 AM in Richmond Courtroom 7400 before District Judge Robert E. Payne re: Consent Decree (sneal, ) (Entered: 06/08/2012)
5 TRANSCRIPT of proceedings for June 11, 2012, before Judge Robert E. Payne, Court Reporter Diane Daffron, Telephone number 804 916−2267. NOTICE RE REDACTION OF TRANSCRIPTS:The parties have thirty(30) calendar days to file with the Court a Notice of Intent to Request Redaction of this transcript. If no such Notice is filed, the transcript will be made remotely electronically available to the public without redaction after 90 calendar days. The policy is located on our website at www.vaed.uscourts.gov Transcript may be viewed at the court public terminal or purchased through the court reporter before the deadline for Release of Transcript Restriction. After that date it may be obtained through PACER Redaction Request due 7/11/2012. Redacted Transcript Deadline set for 8/13/2012. Release of Transcript Restriction set for 9/10/2012.(daffron, diane) (Entered: 06/11/2012)
6 ORDER that a hearing on the JOINT MOTION FOR ENTRY OF CONSENT ORDER (Docket No. 2 ) is scheduled for 11:00 a.m. June 26, 2012. It is so ORDERED. Signed by District Judge John A. Gibney, Jr on 6/12/12. (tdai, ) (Entered: 06/12/2012)
7 Motion to appear Pro Hac Vice by Andrew L. Sandler and Certification of Local Counsel Caitlin M. Kasmar Filing fee $ 75, receipt number 0422−3080047. by SunTrust Mortgage, Inc.. (Kasmar, Caitlin) (Entered: 06/14/2012)
8 Motion to appear Pro Hac Vice by Liana R. Prieto and Certification of Local Counsel Caitlin M. Kasmar Filing fee $ 75, receipt number 0422−3080111. by SunTrust Mortgage, Inc.. (Kasmar, Caitlin) (Entered: 06/14/2012)
9 So Ordered 8 Motion for Liana Raquel Prieto to appear Pro Hac Vice as to SunTrust Mortgage, Inc. Signed by District Judge John A. Gibney, Jr on 6/19/12 (lsal) (Entered: 06/19/2012)
10 So Ordered 7 Motion for Attorney Andrew L. Sandler to appear Pro Hac Vice as to SunTrust Mortgage, Inc. Signed by District Judge John A. Gibney, Jr on 6/19/12 (lsal) (Entered: 06/19/2012)
11 RESPONSE in Support re 2 MOTION for Leave to File (UNOPPOSED SUPPLEMENTAL BRIEF IN SUPPORT OF JOINT MOTION FOR ENTRY OF CONSENT ORDER filed by United States Of America. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E, # 6 Exhibit F)(McIntosh, Robert) (Entered: 06/25/2012)

Case: 3:12-cv-397 As of: 11/11/2017 07:55 PM EST 3 of 4

06/26/2012
06/29/2012
07/10/2012 09/14/2012 09/15/2015 09/29/2015 10/01/2015 10/29/2015 11/16/2015
10/31/2016
11/02/2016 11/02/2016 11/04/2016

12 Minute Entry for proceedings held before District Judge Robert E. Payne: Hearing held on 6/26/2012 re: Approval of a Consent Decree. Counsel for the United States and the Defendant made statements to the Court. The Court instructed counsel to prepare a Consent Decree consistent with instructions the Court gave to counsle and submit it to the Court for review and/or approval. (Court Reporter Diane Daffron, OCR.)(sneal, ) (Entered: 06/26/2012)
13 TRANSCRIPT of proceedings for dates of June 26, 2012, before Judge Robert E. Payne, Court Reporter Diane Daffron, Telephone number 804 916−2267. NOTICE RE REDACTION OF TRANSCRIPTS:The parties have thirty(30) calendar days to file with the Court a Notice of Intent to Request Redaction of this transcript. If no such Notice is filed, the transcript will be made remotely electronically available to the public without redaction after 90 calendar days. The policy is located on our website at www.vaed.uscourts.gov Transcript may be viewed at the court public terminal or purchased through the court reporter before the deadline for Release of Transcript Restriction. After that date it may be obtained through PACER Redaction Request due 7/30/2012. Redacted Transcript Deadline set for 8/29/2012. Release of Transcript Restriction set for 9/27/2012.(daffron, diane) (Entered: 06/29/2012)
14 NOTICE by United States Of America re 12 Motion Hearing, "Unopposed Motion for Entry of Revised Consent Order and Brief in Support" with proposed Consent Order attached (original paper copy with signatures to be lodged in Clerk's Office) (Attachments: # 1 Proposed Order)(McIntosh, Robert) (Entered: 07/10/2012)
15 CONSENT ORDER (See Order for details). Signed by District Judge Robert E. Payne on 9/14/12 (lsal) (Entered: 09/14/2012)
16 Joint MOTION FOR ENTRY OF DISBURSEMENT ORDER by United States Of America. (Attachments: # 1 Proposed Order)(McIntosh, Robert) (Entered: 09/15/2015)
17 DISBURSEMENT ORDER − SEE ORDER FOR DETAILS. Signed by District Judge Robert E. Payne on 09/29/2015. (tjoh, ) (Entered: 09/29/2015)
18 ORDER − Having reviewed the file and entered the DISBURSEMENT ORDER requested by the parties, and it appearing that nothing further remains to be done herein, the Court requires the parties, by October 30, 2015, to advise why this case should not now be dismissed with prejudice. Signed by District Judge Robert E. Payne on 10/01/2015. (tjoh, ) (Entered: 10/01/2015)
19 Response to 18 Order, JOINT RESPONSE TO COURTS OCTOBER 1, 2015 ORDER filed by United States Of America. (McIntosh, Robert) (Entered: 10/29/2015)
20 ORDER re 19 Response filed by United States Of America. It is hereby ORDERED that the parties shall submit a Consent Order of Dismissal With Prejudice not later than October 31, 2016, and, to that end, counsel shall follow up with distribution to expedite the filing of reports required by paragraph 22 of the Disbursement Order. Signed by District Judge Robert E. Payne on 11/16/2015. (tjoh, ) (Entered: 11/16/2015)
21 ORDER The Court having received a request by the United States for an extension of time to submit the Consent Order as required by the ORDER 20 filed herein on November 16, 2015, it is hereby ORDERED that the request for an extension is granted. It is further ORDERED that the parties shall submit a Consent Order of Dismissal With Prejudice not later than November 4, 2016. Signed by District Judge Robert E. Payne on 10/31/2016. (tjoh, ) (Entered: 10/31/2016)
22 Joint MOTION to Dismiss With Prejudice by United States Of America. (Attachments: # 1 Proposed Order)(McIntosh, Robert) (Additional attachment(s) added on 11/2/2016: # 2 Exhibit A) (tjoh, ). (Entered: 11/02/2016)
23 DISREGARD − DOCKETED IN ERROR EXHIBIT A to Joint Motion for Entry of Consent Order of Dismissal With Prejudice by United States Of America.. (McIntosh, Robert) Modified on 11/2/2016 (tjoh, ). (Entered: 11/02/2016)
24 CONSENT ORDER OF DISMISSAL WITH PREJUDICE − It is ORDERED that the Defendant will require The Up Center and Tallahassee Lenders' Consortium Inc. to return any funds they have not spent by January 15, 2017 to provide credit and housing

Case: 3:12-cv-397 As of: 11/11/2017 07:55 PM EST 4 of 4
counseling (including assistance in obtaining loan modification and preventing foreclosure), legal representation of borrowers seeking to obtain a loan modification or to prevent foreclosure, financial literacy, or other related programs targeted at African−American and Hispanic potential and former homeowners; it is further ORDERED that the Defendant will redistribute any returned funds to one or more of the other 13 organizations named in the Disbursement Order entered on September 29, 2015 to be spent toward the purposes specified in that Order; it is further ORDERED that this case is DISMISSED WITH PREJUDICE. Signed by District Judge Robert E. Payne on 11/03/2016. (tjoh, ) (Entered: 11/04/2016)