SunTrust to Pay Up to $320 Million To End Probe Into Mortgage Modifications

SunTrust Banks Inc., Georgia’s biggest lender, agreed to pay as much as $320 million to resolve federal criminal allegations that it mishandled applicants for mortgage modifications.

The agreement, which lets the bank avoid prosecution, includes at least $179 million in “consumer remediation,” a sum that could rise to a maximum of $274 million, to resolve claims related to its administration of the federal Home Affordable Modification Program, known as HAMP, the Atlanta- based company said in a statement July 3.

“Instead of helping distressed homeowners, SunTrust’s mismanagement drove up foreclosures,” Attorney General Eric Holder said in a separate statement. The ...