Fed Fine Citibank $8.6M For Deficiencies In Mortgage Docs

by Ike Obudulu Posted on August 10th, 2018

Washington, D.C., USA:  The Federal Reserve Board on Friday announced an $8.6 million fine against Citigroup for the improper execution of residential mortgage-related documents.

The $8.6 million penalty addresses the deficient execution and notarization of certain mortgage-related affidavits prepared by a subsidiary, CitiFinancial. The improper practices occurred in 2015 and were corrected. CitiFinancial exited the mortgage servicing business in 2017.

Also on Friday, the Board announced the termination of an enforcement action from 2011 against Citigroup and CitiFinancial related to residential mortgage loan servicing. The termination of this action was based on evidence of sustainable improvements.

The Fed order specifically targeted affidavits that were prepared by employees of CitiFinancial — in connection with the subsidiary’s exiting the mortgage servicing business — that contained information about the owner of mortgage notes.

From January 2015 through August 2015, the order said, employees executed affidavits in which affiants based assertions on “personal knowledge” or a “review … of the relevant books and records.” However, “in certain cases, the signer was not in a position to have personal knowledge or review the relevant books and records,” the order said.

During that same time period, the order stated, certain affidavits were not properly notarized.

In 2014, Citi had begun the process of unwinding CitiFinancial’s servicing business following the release of a 2011 consent order requiring the two companies to address certain mortgage servicing deficiencies. CitiFinancial’s exit from the mortgage servicing business was completed in 2017.

The Fed in 2012 had fined Citigroup based on the “unsafe and unsound” conduct that was the subject of the consent order.

As part of Friday’s announcement, the Fed also said it was terminating the 2011 consent order.

Citi issued a statement Friday saying the company “is pleased to have resolved these matters.”

“The affidavit issue was self-reported, swiftly corrected and did not affect homeowners,” the statement said.


Ike Obudulu

Ike Obudulu

Versatile Certified Fraud Examiner, Chartered Accountant, Certified Internal Auditor with an MBA in Finance And Investments who has both worked for and consulted with some of the world's largest companies on main street and wall street in over 20 countries, Ike brings his extensive reporting and investigations experience to bear on his role as Chief Editor.

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