The 2014 consent judgment doesn't hand borrowers the lever they thin
A federal judge tossed a borrower's claim that Truist Bank had to release a mortgage lien on his Florida home.
The homeowner pinned his case on a 2014 consent judgment - struck in a federal enforcement action by the US government and the Consumer Financial Protection Bureau against SunTrust Mortgage - arguing it required the bank to discharge the lien after it dropped a foreclosure and charged off his loan. On September 22, the US District Court for the District of Columbia granted Truist's motion to dismiss.
Here is what servicers should know.
The borrower took out a $170,000 mortgage with SunTrust in April 2005, secured by his Port Charlotte, Florida residence, maturing May 2, 2025. After a Chapter 7 discharge in April 2011, he stopped making payments. SunTrust filed foreclosure in April 2012.
Within months, SunTrust reversed course. It charged off the account in September 2012, then dismissed the foreclosure without prejudice and discharged a lis pendens at year's end. What it did not do was release the mortgage lien.
The borrower turned to the 2014 Consent Judgment which resolved consumer-protection violations tied to SunTrust's servicing practices. That judgment required a servicer that "makes a determination not to pursue foreclosure" to notify the borrower and release the lien. Representing himself, he argued the bank's actions were exactly that.
The court was unconvinced - on three grounds.
First, borrowers have no private right to enforce the consent judgment. Enforcement authority belongs to a court-appointed monitor, a government monitoring committee, the United States, and participating states. A different section of the same judgment expressly named borrowers as beneficiaries for another provision - making their absence from the lien-release section telling.
Second, the statute of limitations had not expired. The court held that voluntary dismissal of a foreclosure revokes the acceleration and restores the original installment schedule. The mortgage matured May 2, 2025, so the foreclosure clock runs until 2030.
Third, nothing showed abandonment. A voluntary dismissal without prejudice "creates a new cause of action," and a charge-off is "strictly a bookkeeping or accounting procedure" - not a decision to walk away from the lien.
For servicers carrying legacy liens from the settlement era, the practical message: a charge-off and a dismissed foreclosure do not create a lien-release obligation, and borrowers cannot privately enforce the consent judgment to force one.
