Kansas consumers who financed their mortgage through Citigroup may have a financial settlement in their future. Just this week, Citigroup settled its mortgage investigation with the Department of Justice. The bank is set to pay a reported $7 billion to settle the case.
The investigation centered on Citigroup’s mortgage-backed securities. Many of these securities were sold as the nation moved toward the 2008 financial crisis. Just over $4 billion will be paid in cash. About half of this amount is slated for consumer relief. The bulk of the cash portion is set to go to the Justice Department as a civil payment. About $500 million will go to compensation payments to state attorneys general and the Federal Deposit Insurance Corp.
Attorney General Eric Holder is pleased with the settlement. He believes that the penalty is appropriate because Citigroup was aware of the defects in the risky loans that they secured. Instead of warning consumers, the bank and its employees concealed the defects and continued to make a profit. The news of the settlement seemed to help the bottom line of Citigroup because their shares went up 1.4% before the opening of the stock market.
It is not known at this time how soon consumers may see relief from the Citigroup settlement. However, for some Kansans, the mortgage crisis has not ended. Facing foreclosure presents a scary future. A bankruptcy attorney may be able to help. A chapter 7 or chapter 13 bankruptcy may help a home owner to stop foreclosure. An experienced bankruptcy attorney can help potential applicants determine the best legal route.
Source: The Huffington Post, “Citigroup Will Pay $7 Billion To End DOJ Mortgage Investigation,” July 14, 2014