Common use of SunTrust Clause in Contracts

SunTrust. SunTrust Mortgage is the mortgage banking arm of SunTrust Banks, Inc. SunTrust Mortgage originates about $30 billion in mortgage loans and has a servicing portfolio valued at almost $140 billion. SunTrust Mortgage services loans owned both by private-sector financial institutions as well as government-sponsored enterprises (“GSEs”). In 2009 when HAMP was announced, approximately 73% of the roughly 950,000 loans serviced by SunTrust Mortgage were owned by government-sponsored enterprises. In 2008, America entered a deep recession and housing crisis that significantly impacted many financial institutions. In response, Congress enacted the Troubled Asset Relief Program (“TARP”) as part of the Emergency Economic Stabilization Act of 2008, which was designed to restore liquidity and stability to the financial industry. In effect, the government supplied the banks with capital to weather the recession by investing in those financial institutions in exchange for preferred shares of the institution’s stock. In 2008, SunTrust applied for and received $4.85 billion from the U.S. Treasury under TARP. SunTrust repaid the TARP funds on March 31, 2011. Financial institutions were not the only group in need of aid; homeowners needed help, too. Some TARP programs were thus designed to provide assistance to homeowners who were having difficulty paying their mortgages. In February 2009, the Secretary of the Treasury and the Director of the Federal Housing Finance Agency announced the Making Home Affordable Program, part of the Financial Stability Act. One subcomponent of that program is HAMP, which was launched shortly thereafter on March 4, 2009. HAMP remains an active program today. The objective of HAMP is to help Americans keep their homes. HAMP allows qualified borrowers to have their residential mortgage loans modified by reducing their monthly mortgage payments to 31% of their monthly gross income. HAMP is administered differently depending on whether the loan is owned by a private financial institution or a GSE. The Treasury Department runs HAMP using TARP funding for all privately-owned loans (referred to herein as “Treasury HAMP”), while the GSEs offer a parallel HAMP program for GSE-owned loans (“GSE HAMP”). The U.S. Government encourages, but does not require, mortgage servicers to participate in Treasury HAMP, and SunTrust has elected not to participate. Financial institutions who service loans owned by the GSEs, however, are required to participate in GSE HAMP. SunTrust thus offered, and continues to offer, HAMP modifications for the eligible population of its approximately 700,000 GSE loans. SunTrust is required to electronically report on its compliance with GSE HAMP to the Treasury Department through a government reporting system known as IR2.