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According to Clayton, the group's expansion is driven by "growing demand for due diligence services within the recovering private-label securitization market." Year-todate, the company says it has performed due diligence on more than 7,700 loans that have come to market. To manage the group, Clayton has brought on Dan Pinero as director of securitization for operations and Joe Ozment as director of securitization for client services. In addition, Clayton announced it has secured an additional 18,000-square-foot space in Atlanta to accommodate the expanding securitization business. There are currently 80 due diligence professionals based in the Atlanta facility, with an additional 220 operating in the company's Tampa facility. SunTrust Settles Legacy Mortgage Issues with Feds and GSEs SunTrust Banks, Inc., is ponying up millions to resolve mortgage-related legal matters with several federal agencies and settle mortgage repurchase claims from Fannie Mae and Freddie Mac. The Atlanta-based lender announced that its third-quarter numbers will be negatively impacted by these resolution actions, resulting in an after-tax earnings reduction of $179 million, or $0.33 per share. "SunTrust is pleased to have resolved a number of legacy mortgage matters. These settlements reduce uncertainty, further improve our risk profile, and enhance our ability to focus on future growth," said William H. Rogers Jr., chairman and CEO of SunTrust Banks. SunTrust reached agreements with HUD and the Department of Justice to settle claims related to SunTrust's origination of mortgages insured by the Federal Housing Administration (FHA) and its portion of the National Mortgage Settlement pertaining to both servicing and origination practices. SunTrust's commitment under the agreements includes consumer relief of $500 million and a cash payment of $468 million. The Federal Reserve said separately that it issued $160 million in monetary sanctions against SunTrust "for unsafe and unsound processes and practices in residential mortgage loans servicing and foreclosure processing." The Fed's penalty terms are similar to 78 the penalties it issued last year against five other mortgage servicing organizations involved in the National Mortgage Settlement with state attorneys general and federal agencies. According to the Federal Reserve, SunTrust is required to pay the amount of the sanction not spent within two years of December 31, 2013, on providing borrower assistance or to fund nonprofit housing counselors. The Federal Reserve required SunTrust to take corrective measures related to its servicing and foreclosure practices as part of an enforcement action levied against the company in April 2011, along with 13 other servicing organizations. SunTrust also reached agreements with Fannie Mae and Freddie Mac to resolve outstanding and potential loan repurchase obligations. "Fannie Mae's agreement with SunTrust is another sign of progress in addressing outstanding issues so that the housing market can continue to strengthen," said Bradley Lerman, Fannie Mae's EVP and general counsel. "This agreement resolves repurchase issues and compensates taxpayers fairly, allowing Fannie Mae and SunTrust to move forward with an even stronger relationship." Lerman says the GSE expects to complete its reviews of legacy loans for potential repurchase by the end of the year. Fannie Mae entered into similar repurchase agreements with Bank of America and Citi earlier this year. In the third quarter, SunTrust reserved an additional $63 million, which included a $15 million previously disclosed charge related to the Freddie Mac agreement that was initially announced September 30, in which the bank agreed to pay a total of $65 million to cover repurchase obligations on 312,000 soured loans. The subsequent settlements forged with both GSEs cover a broader population of loans than accounted for by the company's existing repurchase reserve, SunTrust explained. SunTrust also disclosed that separately, it entered into an agreement to sell mortgage servicing rights (MSRs) on approximately $1 billion in unpaid principal balance of predominantly delinquent mortgages. As a result of an expanded review of its servicing advance practices conducted in the third quarter, SunTrust refined its loss estimates and valuation methodologies for this MSR sale and other servicing advances, resulting in an additional $96 million charge to the company's Q 3 earnings. CredAbility, ClearPoint to Merge Atlanta-based CredAbility and ClearPoint Credit Counseling Solutions, headquartered in Richmond, Virginia, have agreed to merge the two organizations effective December 31, 2013. The merger will create the second largest nonprofit credit counseling agency in the nation, with 50 offices in 15 states from California to New York. Together, the two agencies counseled nearly 2 million financially distressed households during the past five years. The name of the new organization will be ClearPoint Credit Counseling Solutions and its headquarters will be in Atlanta. Chris Honenberger, CEO of ClearPoint, will be the CEO of the newly combined organization. Phil Baldwin, CEO of CredAbility, will become president. The board of directors will consist of 30 directors, 15 from each organization. The new organization will have more than 150 credit, housing, and bankruptcy counselors and financial educators. It will also have one of the nation's largest Spanishspeaking staffs of counselors. "By combining our strengths—ClearPoint's credit card repayment plans with CredAbility's housing and bankruptcy counseling—we have created a stronger, more robust full-service counseling and education organization," Honenberger said. "In addition, with more people seeking financial counseling and education online and by phone, the combination also allows us to invest in new technology more efficiently." "This merger provides us with the financial resources to grow, which will help millions of low- and moderate-income households across the nation," Baldwin added. "In addition to helping people in financial distress, we now have the resources to provide people with new services that will help them build financial security." STAT INSIGHT Unemployment rate in Georgia at the end of Q2 2013. Source: FDIC

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