Citi to end mortgage probes with $7bn deal

Citi Building Sign

Citigroup and U.S. authorities will announce a $7bn agreement as soon as today to end probes of the bank’s sales of mortgage-backed bonds, according to a person with direct knowledge of the matter.

Bloomberg News reports that the deal, signed over the weekend, requires the firm to pay $4bn to the Justice Department, about $300m to state attorneys general and about $200m to the Federal Deposit Insurance, and to provide $2.5bn in relief for consumers, the person said, asking not to be named because the talks are private.

The settlement includes a statement of facts, outlining the allegations, the person said.

Citigroup was among lenders including Bank of America investigated by the Justice Department for allegedly misrepresenting the quality of mortgage-backed bonds sold to investors as housing prices plummeted. JPMorgan agreed in November to pay $13bn to resolve similar federal and state probes. The government has sought about $17bn from Bank of America, a person familiar with those talks has said.

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Citigroup Said Poised to End Mortgage Probe With $7 Billion Deal

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