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Citi Settles Reckless Mortgage Lending Lawsuit for $158.3 million

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A civil fraud lawsuit filed by the government against CITIBANK, N.A. subsidiary CITIMORTGAGE, INC has been settled.

Helen Kanovsky, General Counsel of the U.S. Department of Housing and Urban Development, David A. Montoya, Inspector General of HUD, and Preet Bharara, United States Attorney for the Southern District of New York announced the settlement. The lawsuit sought damages and penalties under the False Claims Act and the Financial Institutions Reform, Recover, and Enforcement Act of 1989.

The lawsuit said that for six years CITIMORTGAGE participated in misconduct, failed to comply fully with all HUD-FHA requirements regarding certain loans, and submitted certifications stating that some loans were eligible for FHA mortgage insurance, when they weren’t, Here Is The City reported.

Manhattan U.S. Attorney Preet Bharara stated: ‘For far too long, lenders treated HUD’s insurance of their mortgages like they were playing with house money. In fact, they were playing with other people’s money and other people’s homes. CITIMORTGAGE is the latest in a series of cases this office has filed against lenders who flouted HUD requirements for making government-backed loans. We are pleased that, with today’s settlement, CITIMORTGAGE has accepted responsibility for its conduct and agreed to pay damages in an amount that will significantly compensate HUD in this case for losses to the FHA insurance fund’.

 

breakinglawsuitnews.com disclaimer: This article: Citi Settles Reckless Mortgage Lending Lawsuit for $158.3 million was posted on Friday, February 17th, 2012 at 6:51 pm at breakinglawsuitnews.com and is filed under Fraud Lawsuits.

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