Citi agrees to $1.125 billion mortgage bond investor settlement
Resolves legacy mortgage-backed securities
Citigroup announced that it reached an agreement with 18 institutional investors, represented by Gibbs & Bruns, regarding the resolution of certain legacy private-label securitization representation and warranty repurchase claims.
Citigroup will offer to the trustees of 68 Citi-sponsored mortgage securitization trusts to pay $1.125 billion to the trusts, plus certain fees and expenses.
According to a release, the 68 trusts covered by the agreement issued in the aggregate $59.4 billion of residential mortgage-backed securities and represent all of the trusts established by Citi's legacy securities and banking business during 2005-2008.
The agreement, if accepted by the trustees, would release Citi obligation to repurchase mortgage loans sold into the trusts.
"This settlement resolves a significant legacy issue from the financial crisis and we are pleased to put it behind us," Citi said in a statement.