Delaware Attorney General Beau Biden announced that Citigroup Inc. will pay at least $17 million to Delaware to settle allegations stemming from its role in 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.
Over the past three years, Biden has secured more than $130 million for Delaware from financial institutions in housing-related settlements.
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, according to Biden’s office.l
Previous financial settlements that Biden’s office has secured with banks relating to their conduct that contributed to the housing crisis include:
· In February 2012, Biden, other attorneys general and the federal government signed a $25 billion settlement with the nation’s five largest mortgage-servicing banks. That settlement brought $11.7 million to the state and has, so far, meant $75 million in financial benefits to 3,000 Delawareans. It also included new protections for America’s military personnel that Biden fought to include;
· In November 2013, Biden secured $19 million from JP Morgan Chase to settle allegations that the bank misled investors about the risk level of mortgage-backed securities; and
· In December 2013, Biden announced that Ocwen Financial Corporation and its subsidiary, Ocwen Loan Servicing, will provide $7 million to Delaware borrowers, holding Ocwen accountable for past mortgage servicing and foreclosure abuses, providing relief to homeowners and stopping future fraud and abuse.
