Citigroup to Pay $7 Billion to Resolve Mortgage Securities Investigation

July 15, 2014
Washington Post 
mortgage lending news
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.

Abstract News © Copyright 2008-2013 INFORMATION, INC.
Powered by Information, Inc.

Stay Updated

Join the fight against predatory lending. Enter your e-mail to sign up for breaking news, action alerts, and CRL's original research.

   Please leave this field empty

Help Us End Predatory Lending

Predatory lending destroys family wealth, and preys on our most vulnerable communities. You can help us end abusive lending practices by donating to CRL, or by sharing our work with others.