Citi subsidiaries CitiFinancial Servicing and CitiMortgage, Inc. have been ordered to pay $28.8 million in civil penalties, compensation and refunds by the Consumer Financial Protection Bureau (CFPB) for giving “the runaround” to homeowners struggling to make mortgage payments, including failing to communicate options for foreclosure relief and requesting unnecessary documentation. CitiFinancial Servicing violated the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”), the Fair Credit Reporting Act and the Real Estate Settlement Procedures ACT (RESPA), while CitiMortgage violated Dodd-Frank and RESPA.
“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 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.”
According to the CFPB, some homeowners who sought assistance from CitiFinancial Servicing were offered a deferment, but not given options for foreclosure relief, which is required by the Bureau. CitiFinancial Servicing also imposed an immediate due date for deferred interest, despite informing homeowners the interest would be due at the end of the loan term. Other homeowners wrongly continued to pay credit insurance or had their credit insurance canceled by CitiFinancial Servicing.
Homeowners who sought assistance from CitiMortgage, according to the CFPB, received a letter mandating they produce documentation that was either already handed over or irrelevant to the foreclosure relief application.
CitiFinancial Servicing is required to pay a $4.4 million civil penalty and $4.4 million in consumer refunds; CitiMortgage is required to pay a $3 million civil penalty and $17 million in consumer compensation.
For more information, please visit www.consumerfinance.gov.
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