SunTrust Banks (STI) has agreed to pay as much as $320 million to settle an investigation into its administration of Home Affordable Modification Program loans.

The $180 billion-asset Atlanta company had been investigated for making misrepresentations and failing to properly process applications for HAMP modifications of mortgages. SunTrust had previously disclosed the investigation in August.

The deal is separate from a settlement that SunTrust announced in June, in which it agreed to pay $968 million to settle charges that it violated laws governing foreclosures, mortgage origination and servicing. That agreement was made with 49 state attorneys general and several federal agencies.

As part of the settlement announced Thursday with the U.S. Attorney for the Western District of Virginia, SunTrust will initially pay $179 million to consumers. SunTrust could pay an additional amount, up to $95 million, if it proves necessary to compensate consumers, a company spokesman said.

In addition, SunTrust will pay $20 million for housing counseling for homeowners, $10 million for restitution to Fannie Mae and Freddie Mac, and $16 million to the U.S. Treasury.

SunTrust will take a $204 million pretax charge in the second quarter for the settlement.

"We recognize that there were deficiencies in our administration of HAMP during the recession, and through the improvements we have made to our internal processes and this restitution plan, we are demonstrating our commitment to meet the high standards that we set for ourselves and that our customers expect," Jerome Lienhard, president and CEO of SunTrust Mortgage, said in a press release.

SunTrust "accepts and acknowledges responsibility for its conduct and the conduct of its employees," the company said in the restitution and remediation agreement, filed on Thursday with the Securities and Exchange Commission.

The law firm McGuireWoods negotiated the agreement on behalf of SunTrust.

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