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CFPB Orders Citi Subsidiaries to Pay $28.8M for Wronging Consumers Trying to Save Their Homes
Wednesday, January 25, 2017 6:40 AM

Mortgage Servicers Kept Borrowers in the Dark about Options, Demanded Excessive Paperwork

The Consumer Financial Protection Bureau on Tuesday took separate actions against CitiFinancial Servicing and CitiMortgage, Inc. for giving the runaround to struggling homeowners seeking options to save their homes. The mortgage servicers kept borrowers in the dark about options to avoid foreclosure or burdened them with excessive paperwork demands in applying for foreclosure relief. The CFPB is requiring CitiMortgage to pay an estimated $17 million to compensate wronged consumers and pay a civil penalty of $3 million; and requiring CitiFinancial Services to refund approximately $4.4 million to consumers, and pay a civil penalty of $4.4 million.

“Citi’s subsidiaries gave the runaround to borrowers who were already struggling with their mortgage payments and trying to save their homes,” said CFPB Director Richard Cordray. “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.”

CitiFinancial Servicing
CitiFinancial Servicing violated the Real Estate Settlement Procedures Act, the Fair Credit Reporting Act, and the Dodd-Frank Wall Street Reform, and Consumer Protection Act’s prohibition on deceptive acts or practices. Specifically, CitiFinancial Servicing:

  • Kept consumers in the dark about foreclosure relief options.
  • Misled consumers about the impact of deferring payment due dates.  
  • Charged consumers for credit insurance that should have been canceled.
  • Prematurely canceled credit insurance for some borrowers.
  • Sent inaccurate consumer information to credit reporting companies.
  • Failed to investigate consumer disputes.

Under the consent order, CitiFinancial Servicing must:

  • Pay $4.4 million in restitution to consumers.
  • Clearly disclose conditions of deferments for loans.
  • Stop supplying bad information to credit reporting companies.
  • Pay a civil money penalty of $4.4 million to the CFPB Civil Penalty Fund for illegal acts. 

View the consent order against Citi Financial Services.

CitiMortgage
CitiMortgage violated the Real Estate Settlement Procedures Act and the Dodd-Frank Act’s prohibition against deceptive acts or practices. Under the terms of the consent order, CitiMortgage must:

  • Pay $17 million to wronged consumers.
  • Clearly identify documents consumers need when applying for foreclosure relief.
  • Freeze any foreclosures related to the flawed application process and reach out to harmed consumers.
  • Pay a civil money penalty of $3 million to the CFPB Civil Penalty Fund for illegal acts. 

View the consent order against CitiMortgage.

For more information, please visit the CFPB Newsroom.