Citigroup Units Settle CFPB Mortgage Servicing Claims for $28.8 Million
January 23 2017 - 3:49PM
Dow Jones News
By Yuka Hayashi
WASHINGTON -- Two mortgage servicing units of Citigroup Inc.
agreed to pay $28.8 million to settle allegations from the Consumer
Financial Protection Bureau that they mistreated borrowers seeking
foreclosure relief.
The federal watchdog agency alleged Monday that CitiFinancial
Servicing and CitiMortgage Inc. gave struggling homeowners the
"runaround", including keeping borrowers in the dark about options
to avoid foreclosure or burdening them with excessive paperwork
demands when applying for foreclosure relief.
The settlement calls on the two subsidiaries to refund a
combined $21.4 million to affected borrowers and pay $7.4 million
in civil penalties.
A Citigroup spokesman said the company was "pleased to resolve
these matters."
Monday's action is a sign the CFPB is continuing to pursue an
aggressive enforcement agenda despite pressure from congressional
Republicans and the Trump administration to rein in its activities.
In the past two months, it has filed more than a dozen enforcement
actions, sometimes drawing sharp responses from targeted companies
denying the bureau's allegations.
"Citi's subsidiaries gave the runaround to borrowers who were
already struggling with their mortgage payments and trying to save
their homes," CFPB Director Richard Cordray said in a written
statement.
The Citigroup case has some resemblance to charges the CFPB made
against Navient Corp. in a lawsuit filed Jan. 18. The bureau
alleged the nation's largest student loan servicer created
obstacles for borrowers to repay their debts by providing
inaccurate information and failing to process payments properly.
Navient is fighting a civil lawsuit brought the CFPB, saying the
allegations were "unfounded."
Write to Yuka Hayashi at yuka.hayashi@wsj.com
(END) Dow Jones Newswires
January 23, 2017 15:34 ET (20:34 GMT)
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