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Investments / The Ticker

Citi nears resolution on massive mortgage fraud probe

Follows string of high profile settlements


Citi [C] is said to be nearing a settlement with the Justice department in regard to a mortgage probe investigating the allegation of fraud and document mishandling according to the Wall Street Journal.

The article points out this is the latest in a string of such investigations:

A settlement with Citigroup next week would come on the heels of an $8.9 billion deal between federal and state officials and BNP Paribas SA that required the French bank to plead guilty to criminal charges related to the violation of U.S. sanctions.

The Justice Department also has been in talks with Bank of America Corp. to resolve civil probes over its mortgage business. The Citigroup mortgage investigation is among a handful of cases relating to bank conduct ahead of the 2008 financial crisis still pending before the Justice Department.

According to the report, the issue at hand is the total amount.

Citigroup offered about $4 billion, while the government was seeking close to $10 billion. That is a figure the bank found "objectionable" according to people familiar with the matter, according to the article.

Last year, Mega bank JPMorgan Chase (JPM) reached a $4.5 billion agreement with 21 major institutional investors to resolve legacy mortgage-backed securities issues.

Source: The WSJ
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