Politics & MoneyMortgage

Government officials will not pursue criminal charges against Citigroup

Prosecutors can’t charge individuals due to lack of evidence

Government officials chose not to pursue criminal charges against Citigroup executives or employees related to packaging and selling mortgage-backed securities dating back to the 2008 financial crisis, according to an article by Nate Raymond for Reuters.

The decision was made following Citigroup’s $7 billion settlement in 2014, resolving federal and state civil claims mortgage bonds.

From the article:

Its release marked the first public acknowledgement by U.S. authorities that executives at a major bank linked to the financial crisis would face no criminal charges for their involvement in selling billions of dollars of toxic mortgage bonds.

The report, by the Federal Housing Finance Agency's Office of Inspector General, one of the agencies in the Citigroup probe, said following the settlement, prosecutors reviewed the evidence to see if any individuals could be charged and determined "there was not enough compelling evidence."

The review came at the request of the Justice Department, which requested that all mortgage-backed securities settlements reached with the government be reviewed with the intention of determining if individuals could be held responsible, according to the article.

Among those settlements was Bank of America, which reached a settlement of $16.65 billion over toxic mortgages.

The bank admitted to failing to disclose known uncertainties regarding potential increased costs related to mortgage loan repurchase claims connected to more than $2 trillion in residential mortgage sales.

Most recently, Morgan Stanley settled for $3.2 billion over deceptive mortgage bond practices. The settlement stems from Morgan Stanley’s alleged misrepresentations about the security and safety of residential mortgage-backed securities it sold before the financial crisis.

Also included is JPMorgan Chase, which reached a settlement of $13 billion. 

Most Popular Articles

Is the housing market already rebounding from COVID-19?

In early April, HousingWire Columnist Logan Mohtashami wrote about five indicators that would show when “America is back.” Now, he’s checking in on each data point to see where the U.S. housing market stands.

May 26, 2020 By

Latest Articles

[PULSE] Does the mortgage industry view foreclosure as a last resort?

Even in normal conditions foreclosure is a cumbersome solution to the problem of the defaulting borrower. It can produce vacant and abandoned properties, because as soon as the residents receive notice that the house will be going into foreclosure, they face uncertainty about when they will be ousted, which prompts many to vacate the premises before getting thrown out.

May 28, 2020 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please