SunTrust Banks (STI) is forecasting as much as $300 million in legal losses tied to mortgage probes, and it has disclosed the existence of four new investigations.

The Atlanta company said its losses related to ongoing litigation and government investigations could range from nothing to as much as $300 million. The range was disclosed in SunTrust's annual report filed Monday. SunTrust's previous estimate of losses ranged from zero to $250 million.

The $175 billion-asset SunTrust did not specify whether the higher range of losses was related to the new legal matters that it disclosed in the annual report.

The four new probes disclosed are:

  • The Justice Department last month began an investigation into the origination and underwriting of single-family loans that SunTrust has sold to Fannie Mae and Freddie Mac. SunTrust said it's cooperating and that "no allegations have been raised against it." SunTrust previously reached a separate agreement with the Justice Department on the securitization of loans sold to Fannie and Freddie.
  • SunTrust has new disagreements with the Department of Housing and Urban Development on the tentative agreement it had reached in October regarding mortgage loans backed by the Federal Housing Administration. SunTrust had initially agreed to "provide $500 million of consumer relief, to make a $468 million cash payment, and to implement certain mortgage-servicing standards," it said in the annual report.
  • The inspector general of the Troubled Asset Relief Program and the U.S. Attorney for the Western District of Virginia are pursuing an investigation into SunTrust's administration of Home Affordable Modification Program loans, specifically whether it "violated civil or criminal laws by making misrepresentations and failing to properly process applications for modifications of certain mortgages," SunTrust said in its annual report. SunTrust said it believes it has "substantial defenses" to the allegation.
  • The Federal Housing Finance Agency's inspector general has launched an audit of the agency's oversight of Fannie and Freddie's rights under the settlement agreements they reached with SunTrust and other banks. Last year SunTrust reserved an additional $63 million for mortgage-repurchase losses after it reached agreements with Fannie and Freddie to address outstanding and potential repurchase obligations.

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