Citigroup Settlement: What it Means for Arkansas
Citigroup has finally reached the end of it’s negotiations with the US Justice Dept. As of yesterday, a settlement agreement was reached and Citigroup has agreed to pay $7 Billion for it’s misguiding consumers and deceptive practices used in the sale of mortgage-backed securities. This settlement agreement comes after lengthy talks and negotiations between the Justice Dept. and the company.
The settlement includes a record breaking penalty amount of $4 billion due to the Justice Department. This is the highest penalty amount that has ever been fined before from the federal department.
Why the $7 Billion Settlement?
Citigroup is just one of several financial companies that have been or are currently being investigated for selling poisoned mortgage-backed securities and knowingly misguiding the American public. Because of practices like this, the housing market took a horrible blow and thousands of homeowners fell far behind on their mortgages, went “underwater” on their homes, or completely lost their homes. This pocket-lining greed inevitably led to our economies recession. In the documents released yesterday big banks knew there was a problem with the packaged mortgage-backed securities, but sold them anyways.
So what does this mean for Arkansas?
Well, to start lets breakdown where the $7 billion dollar settlement will go:
- $4 billion in penalty goes to the US Justice Department.
- $2.5 billion will go to Consumer Aid Programs. Consumer Aid programs will help to assist those homeowners who are underwater, distressed homeowners, and homeowners that have been forced to relocate into rental properties because of this debacle:
- Loan forgiveness
- Principal reductions on mortgages
- Interest rate reductions
- Funding to legal aid programs
- Financing assistance for affordable rental housing
- And various other relief options for the homeowners, investors and the communities affected
- $500 million will be given to the FDIC and five states specifically; California, Delaware, Illinois, Massachusetts and New York.
Help for Consumers in Arkansas
All relief is intended for those with mortgages made or serviced by Citigroup. Homeowners struggling to make payments are most likely to be assisted first. Citigroup has agreed to contact those eligible, but some sources are advising that those affected in Arkansas should be proactive and contact Citigroup for information. Consumers that were directly affected by the deceptive practices, specifically individuals who lost their homes, distressed homeowners, and struggling homeowners in AR are urged to reach out for assistance if applicable.
It’s Not Over. Investigations Still Underway
Citigroup is not the only big bank to be forced for fork over settlements. JP Morgan Chase was found guilty of the same grievances earlier in the year. Talks are on-going with several different financial institutions regarding their part in the disgusting mess created. Bank of America, our nations second largest bank, is in negotiations at the moment and is reported to have offered an amount of $12 Billion settlement. However, news sources are reporting that the Justice Dept. will likely see much more than that from the company.
How to Get More Information on the Citigroup Settlement
You can email me with any questions or feel free to take a look at the PDF here, describing the Consumer Relief Assistance Programs and who qualifies.
Have a good rest of your week Arkansas!
Steve Atwell, Buyer’s Agent for Northwest Arkansas
Email: Steve Atwell
Phone: 1-866-809-7059 | Cell: 479-685-3363 | Fax: 1-800-479-1503