What is SunTrust Mortgage?
SunTrust Mortgage is the eight largest servicer of residential mortgages in the United States managing over 950,000 residential mortgage loans with total assets of $172.2 billion as of June 30, 2011. As of 2009, SunTrust employs 28,001 employees and maintains corporate headquarters in Atlanta, Georgia and Orlando Florida. The flagship company is SunTrust Bank of Atlanta and maintains a total of 1,661 branches primarily in several southern US states. The modern day Sun Trust bank is a merger of the Trust Company of Georgia and SunBanks Inc of Florida. The current CEO is William H. Rogers Jr.
What is the corporate structure of SunTrust?
The current Board of Directors consists of sixteen members sitting on five committees. These committees are:
- Audit
- Compensation
- Executive
- Governance and Nomination
- Risk
What services does SunTrust provide?
SunTrust operates like most banks offering personal finance, investment, retirement and loan services.
How did SunTrust fare in the recent financial crisis?
SunTrust’s stock value plummeted in 2007 from $90.61 per share to $9.06 in 2009. They participated in the Troubled Asset Relief Program to prevent its collapse in the face of soaring foreclosures. SunTrust would eventually sell of its shares in The Coca Cola Company to raise capital.
According to the Federal Reserve, SunTrust initiated 41,543 foreclosure actions during a two year period, January 1, 2009 to December 31, 2010. In response to these numbers, the Federal Reserve issued a cease and desist order and accused this lender of improperly assessing the amount of principal, interest, fees and expenses owned by the borrower without proper review of oversight. Many documents presented in court were not notarized which the bank blamed on a lack of staff available to deal with the unprecedented rise in foreclosures coinciding with the economic turmoil. The Fed charged that SunTrust was guilty of unsafe and unsound banking practices as they did not provide sufficient oversight and adequate resources to the accelerated pace of foreclosed properties.
As a result of these findings, the Federal Reserve proceeded to order SunTrust to develop a plan for greater oversight of risk management, auditing and compliance of foreclosure activities especially in relation to the use of independent contractors involved in the process. Additionally, SunTrust was to ensure that they had adequate funding, offices and staff to carry out mortgage loan servicing to prevent similar mistakes from 2009-2010 such as un-notarized documents and the lack of research in regards to individual mortgage claims.
Sources: https://www.federalreserve.gov/newsevents/press/enforcement/enf20110413a8.pdf
