Citigroup’s mortgage units have been fined $28.8m by the Consumer Financial Protection Bureau (CFPB) for giving the runaround to home borrowers seeking foreclosure relief.
The regulator alleged CitiMortgage of making it tough for borrowers to apply for foreclosure relief by requiring them to fill excessive numbers of documents.
Under the settlement, CitiMortgage will have to refund about $17m to approximately 41,000 wronged consumers who received letters in 2014 from the company requesting unnecessary documents on asking for foreclosure relief assistance. The company will also have to pay $3m in civil penalty and freeze any foreclosures related to the flawed application process.
The watchdog alleged CitiFinancial Services of failing to consider borrowers' requests for payment deferments as a request for foreclosure relief options and keeping consumers in the dark about the true impact of postponing a payment due date.
The company will have to pay $4.4m in restitution to 7,800 borrowers who paid for credit insurance that should have been cancelled, and $4.4m in civil penalty.
CFPB director Richard Cordray said: “Citi’s subsidiaries gave the runaround to borrowers who were already struggling with their mortgage payments and trying to save their homes.
“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.”
The companies neither admitted nor denied the wrongdoings.