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Citigroup $7 Billion Mortgage Settlement

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Citigroup will pay approximately $7 billion to settle allegations that it deceived consumers and investors about the riskiness of subpar mortgages in the lead-up to the financial crisis.  Attorney General Eric H. Holder Jr. issued a statement saying that “the bank’s misconduct was egregious, and under the terms of this settlement the bank has admitted to its misdeeds in great detail.” Mr. Holder also commented that the settlement amount is especially appropriate since “as a result of their assurances that toxic financial products were sound, Citigroup was able to expand its market share and increase its profits.”

Citigroup’s settlement follows a similar settlement by J.P. Morgan Chase & Co. for its deception of consumers prior to the financial crisis.  According to Mr. Holder, Citigroup and J.P. Morgan Chase’s conduct significantly contributed to the 2008 financial crisis and caused millions of homeowners to struggle.  Because Citigroup packaged and sold fewer mortgage securities than J.P. Morgan Chase & Co. their settlement was smaller.  Bank of America is also expected to be reaching a settlement with the Justice Department for their behavior in the run-up to the financial crisis.

The $7 billion dollar payout is composed of $4 billion to the U.S. Department of Justice, $2.5 billion in consumer relief, and $500 million in compensatory payments to the state attorneys general and the FDIC.  Mr. Holder has also commented that the settlement does not protect Citigroup or its employees from future criminal charges.

Are you, like so many, struggling to pay your mortgage or at risk of foreclosure?  Call Fazzio Law Offices at (201) 529 – 8024 or fill out our contact form (found on the right side of the page) for advice and assistance.  The lawyers at Fazzio Law Offices stand up for homeowners’ rights and fight to help them keep their homes.


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