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Thursday, May 31, 2012 6:45 PM UTC

SunTrust Mortgage settles fed complaint for $21M

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Topics: From the Wires,

RICHMOND, Va. (AP) — SunTrust Mortgage Inc. has agreed to pay $21 million to settle a federal lawsuit alleging racial discrimination in its lending practices, documents filed Thursday in U.S. District Court show.

The U.S. Justice Department said in a lawsuit that SunTrust Mortgage charged more than 20,000 black and Hispanic borrowers more than non-Hispanic white borrowers, not based on risk but because of race or national origin. The department says it reviewed more than 850,000 residential mortgage loans originated by the company between 2005 and 2009.

The consent order says SunTrust denied wrongdoing but agreed to the settlement to avoid costly and potentially risky 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 the victims of illegal conduct,” Thomas E. Perez, assistant attorney general for the Civil Rights Division, said in a written statement.

The settlement requires the lender to continue using policies it later adopted to prevent discrimination.

“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,” U.S. Attorney Neil H. MacBride said.

The agreement is subject to court approval.

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