Government

SunTrust Banks announced it has struck a nearly $1 billion deal with the government to settle allegations of misconduct in its lending and servicing practices. In an agreement reached with the Consumer Financial Protection Bureau (CFPB), Justice Department, HUD, and attorneys general in 49 states and the District of Columbia, SunTrust agreed to provide relief to consumers and payments to the government totaling a combined value of $968 million.

Despite earning record incomes in 2013, neither Fannie nor Freddie are in the clear financially yet, the Federal Housing Finance Agency (FHFA) said in its latest review of the two GSEs. "The Enterprises remain exposed to credit, counterparty and operational risks. Credit risk management remains a key priority for both Enterprises given their substantial amount of remaining legacy distressed assets and ongoing stress in certain housing markets," FHFA said.

San Antonio Mayor Julian Castro, the president's pick to replace Shaun Donovan as secretary of HUD, appeared to breeze through his first nomination challenge Tuesday as he fielded questions from the Senate Banking Committee. Facing questions from the group of senators, Castro addressed the current stability and role of the Federal Housing Administration (FHA), which had to take a $1.7 billion bailout last year for the first time in its history.

Speaking before an audience at the National Housing Conference Annual Policy Symposium in Washington, D.C., Mary Miller, the Department of the Treasury's undersecretary for domestic finance, painted a grim picture of housing finance as it stands, noting any perceived health at the GSEs has been the result of circumstances that wouldn't be matched in the private market.

The government released Friday its latest Housing Scorecard, once again showing cautious optimism as trends look more favorable. "May's Housing Scorecard shows that the housing market recovery is picking up after the harsh winter months," said HUD assistant secretary Katherine O'Regan. "More homeowners have positive equity, foreclosures continue their downward trend, and sales of new and existing homes are rebounding.

New Jersey-based Stonebridge Title Services has been ordered to pay $30,000 for allegedly offering kickbacks for business referrals, the Consumer Financial Protection Bureau (CFPB) announced. "Kickbacks drive up the costs of getting a mortgage and put law-abiding companies at a disadvantage," said CFPB Director Richard Cordray with the release of the bureau's consent order.

After nearly five and a half years spent trying to steer housing out of a ditch, HUD Secretary Shaun Donovan is on his way out of that agency and into the Office of Management and Budget—but not before taking a victory lap. In an interview with the Washington Post, Donovan looked back on his time spent directing the agency, reflecting on memories ranging from the administration's reaction to Hurricane Sandy to its efforts to reduce homelessness.

Ongoing settlement negotiations between Bank of America and the Justice Department reportedly reached a stalemate Monday. Citing "people briefed on the matter," the New York Times reported late Tuesday that the offer fell far short of the record $17 billion that prosecutors are seeking to resolve the state and federal investigations. BofA is seeking to continue negotiations while the government finishes readying its petition to file in federal court.

CFPB Director Richard Cordray appeared Tuesday in front of the Senate Banking Committee, and as always, the proceedings were contentious. At the hearing, a myriad of topics were discussed, including mortgages, student loans, and proposed data collection efforts for the National Mortgage Database.

A federal appeals court has rejected an attempt by Wells Fargo to block a government suit alleging the bank falsely certified the underwriting credit of loans it originated as a direct endorsement lender for the Federal Housing Administration (FHA). In its attempt to have the suit dismissed, Wells Fargo argued the agreement outlined in 2012's National Mortgage Settlement barred the types of claims the government is now making.