Citigroup agreed Monday to pay a total of $28.8 million to customers and in civil penalties after settling accusations from the Consumer Protection Finance Bureau that two of its mortgage divisions made it difficult for customers to understand options for or actually request mortgage foreclosure relief when they had trouble making payments. File photo by John Angelillo/UPI |
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Jan. 24 (UPI) -- Two subsidiaries of Citigroup were ordered Monday by the Consumer Finance Protection Bureau to pay $28.8 million in fines for intentionally misleading home borrowers looking to avoid foreclosure.
CitiFinancial Servicing was ordered Monday by the CFPB to pay about $8.8 million and CitiMortgage was ordered to about $20 million for making it more difficult for some customers to seek assistance to avoid foreclosure, as well as not making information on options to do so easily available to customers.
"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 statement. "Consumers were kept in the dark about their options or burdened with excessive paperwork. This action will put money back in consumers' pockets and make sure borrowers can get help they need."
CitiMortgage was charged by the CFPB in 2014 for asking customers to fill out unnecessary documents when seeking foreclosure relief, many of which were not required or had already been completed.
The division will have to $17 million to about 41,000 consumers -- about $400 each -- as well as a civil penalty of $3 million to the government to make up for the action against its customers. They are also being ordered to stop any foreclosures of customers using old forms or the previous application process, replacing it with a simplified, clearly identified process and set of forms.
CitiFinancial Servicing was accused of not considering customer requests to defer payments as asking for relief from potential foreclosure. The CFPB is requiring the division to pay $4.4 million to 7,800 borrowers who, between July 2011 and April 2015, paid for credit insurance that should have been canceled when mortgage holders missed payments.
The CFPB is requiring Citi to consider deferment requests as a request for help to avoid foreclosure, making the banker responsible for explaining how deferments work and how they affect interest accruing on loans, in addition to providing customers with options to avoid foreclosure and to stop forwarding the requests to credit reporting companies as dings against credit ratings.
"We are pleased to resolve these matters," Citi said of the settlements, though they were not required to admit or deny wrongdoing by agreeing to settle the accusations.
