SunTrust 2011 Annual Report Download - page 67
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is filed as Exhibit 10.25 to this Form 10-K. The Consent Order requires us to improve certain processes and to retain an
independent consultant to conduct a review of residential foreclosure actions pending during 2009 and 2010 to identify any
errors, misrepresentations or deficiencies, determine whether any instances so identified resulted in financial injury, and then
make any appropriate remediation, reimbursement, or adjustment. Additionally, borrowers who had a residential foreclosure
action pending during this two-year review period have been solicited through advertising and direct mailings to request a
review by the independent consultant of their case if they believe they incurred a financial injury as a result of errors,
misrepresentations or other deficiencies in the foreclosure process. A direct mail solicitation was completed on November
28, 2011. The deadline for submitting requests for review is July 31, 2012. These requirements prescribed by the Consent
Order may result in additional delays in the foreclosure process at a time when the time required for foreclosure upon residential
real estate collateral in certain states, primarily Florida, continues to be elevated. These delays in the foreclosure process have
adversely affected us by increasing our expenses related to carrying such assets, such as taxes, insurance, and other carrying
costs, and by exposing us to losses as a result of potential additional declines in the value of such collateral. These delays
have also resulted, in some cases, in an inability to meet certain investor foreclosure timelines for loans we service for others,
which has resulted, and is expected to continue to result, in the assessment of compensatory fees. Noninterest expense in our
Mortgage line of business increased in 2011 as a result of the additional resources necessary to perform the foreclosure process
assessment, revise affidavit filings and make any other operational changes. Additionally, continued and evolving changes
in the regulatory environment and industry standards have increased our default servicing costs. Finally, the time to complete
foreclosure sales has increased, and this has resulted in an increase in nonperforming assets and servicing advances, and has
adversely impacted the collectability of such advances. Accordingly, additional delays in foreclosure sales, including any
delays beyond those currently anticipated, our process enhancements, and any issues that may arise out of alleged irregularities
in our foreclosure processes, could further increase the costs associated with our mortgage operations. See additional discussion
in Part I, Item 1A, "Risk Factors" in this Form 10-K.
Nonperforming Assets (Pre-Adoption)
(Dollars in millions)
Nonaccrual/NPLs:
Commercial
Real estate:
Construction loans
Residential mortgages
Home equity lines
Commercial real estate
Consumer loans
Total nonaccrual/NPLs
OREO1
Other repossessed assets
Total nonperforming assets
Accruing loans past due 90 days or more2
TDRs:
Accruing restructured loans
Nonaccruing restructured loans3
Ratios:
NPLs to total loans
Nonperforming assets to total loans plus OREO
and other repossessed assets
2011
$127
390
1,655
273
431
27
2,903
479
10
$3,392
$2,028
$2,820
802
2.37%
2.76
2010
$255
1,013
1,988
285
531
38
4,110
596
52
$4,758
$1,565
2,613
1,005
3.54%
4.08
2009
$484
1,484
2,716
289
392
37
5,402
620
79
$6,101
$1,500
1,641
913
4.75%
5.33
2008
$322
1,277
1,847
272
177
45
3,940
500
16
$4,456
$1,032
463
268
3.10%
3.49
Table 15
2007
$75
295
841
136
44
39
1,430
184
12
$1,626
$611
30
—
1.17%
1.33
1Does not include foreclosed real estate related to serviced loans insured by the FHA or the VA. Insurance proceeds due from the FHA and the VA are recorded
as a receivable in other assets until the funds are received and the property is conveyed.
2Includes $979 million, $494 million, and $236 million of consolidated loans eligible for repurchase from Ginnie Mae and classified as held for sale at
December 31, 2009, 2008, and 2007, respectively.
3Nonaccruing restructured loans are included in total nonaccrual/NPLs.
Restructured Loans
To maximize the collection of loan balances, we evaluate troubled loans on a case-by-case basis to determine if a loan
modification would be appropriate. We pursue loan modifications when there is a reasonable chance that an appropriate
modification would allow our client to continue servicing the debt. For loans secured by residential real estate, if the client
demonstrates a loss of income such that the client cannot reasonably support even a modified loan, we may pursue short sales