Citigroup Settles MBS Lawsuit For $25M

Posted by Orb Staff on August 28, 2012 No Comments
Categories : Residential Mortgage

12279_citigroup_logo Citigroup Settles MBS Lawsuit For $25M Citigroup Inc. will pay nearly $25 million to settle a four-year-old lawsuit by investors that charged the lender with offering misleading information on quality of mortgage-backed securities (MBS) that they purchased prior to the collapse of the housing market.

According to a Reuters report, the Ann Arbor Employees' Retirement System and Greater Kansas City Laborers Pension Fund sprearheaded the lawsuit on behalf of investors that purchased certificates in one of two MBS trusts from Citigroup Mortgage Loan Trust Inc. in 2007. The lawsuit accused Citigroup with dubious mortgage underwriting and appraisal standards and with intentionally understating the risk of default on its MBS offerings.

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