Citigroup has agreed to pay $7 billion to the Department of Justice (DOJ) to resolve probes into its sales of troubled mortgage securities -- pools of home loans that the bank issued, structured, and underwrote between 2003 and 2008 -- in the lead-up to the economic meltdown.
Prosecutors found proof that Citigroup ignored warnings about the poor quality of the securitized loans. For instance, an internal e-mail sent by a Citigroup trader advised that colleagues "should start praying" because he "would not be surprised if half of these loans went down."
According to DOJ officials, the settlement includes a $4 billion penalty -- the largest of its kind -- along with $500 million to state attorneys general and the FDIC. The remaining $2.5 billion will be put towards various forms of consumer relief to be distributed by Dec. 31, 2018.