Citibank Reaches $17M Settlement with Delaware - WBOC-TV 16, Delmarvas News Leader, FOX 21 -

Citibank Reaches $17M Settlement with Delaware

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(Photo: MGN) (Photo: MGN)

WILMINGTON, Del – Delaware Attorney General Beau Biden announced Monday that Citigroup Inc. will pay at least $17 million to the state to settle allegations stemming from the bank’s conduct that helped cause the housing crisis.

The settlement with Citi is part of a multi-billion dollar settlement announced Monday between the bank, the United States Department of Justice, four other states and Delaware. The settlement resolves allegations centering on the bundling and sale of mortgages to investors. According to Biden, the investments – bought by pension funds, mutual funds and other investors – were much riskier than advertised. The resulting losses were disastrous for the economy, Biden said.

“Our financial system only works when everyone plays by the rules,” Biden said. “The housing crisis was a manmade disaster that did not have to happen. The funds we have secured have helped thousands of Delaware families avoid foreclosure, strengthen communities hit hard by the housing crisis and reimburse taxpayers.”

Delaware’s recovery comes in two parts. Citi will make a minimum of $10 million in direct relief available to Delaware homeowners in the form of credits similar to the 2012 National Mortgage Settlement (such as mortgage modifications and forgiveness of second mortgages). Citi will also pay the state $7.35 million. As with the recent JPMorgan settlement, these funds will be used to remediate the harm caused by Citi’s misconduct, including reimbursing government entities that suffered losses.

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