“Giving the runaround” to homeowners seeking options to save their homes is cited as the impetus behind a $28.8 million order by the CFPB to two mortgage servicing subsidiaries of one of the nation’s largest financial companies.
In a release, the consumer bureau stated that CitiFinancial Servicing and CitiMortgage, Inc. — the former an indirect subsidiary of Citigroup, Inc., the latter a subsidiary of Citibank, N.A. — “kept borrowers in the dark about options to avoid foreclosure or burdened them with excessive paperwork demands in applying for foreclosure relief.” CFPB Director Richard Cordray stated that “Citi’s subsidiaries gave the runaround to borrowers who were already struggling with their mortgage payments and trying to save their homes.”
The agency stated that it requires CitiMortgage (headquartered in O’Fallon, Mo.) to pay an estimated $17 million to compensate about 41,000 consumers, plus pay a civil penalty of $3 million. CitiFinancial Services is required to refund approximately $4.4 million to consumers, plus pay a civil penalty of $4.4 million.
According to the order, CitiFinancial Servicing (also headquartered in O’Fallon, Mo.) violated the Real Estate Settlement Procedures Act (RESPA), the Fair Credit Reporting Act (FCRA), and the Dodd-Frank Wall Street Reform and Consumer Protection Act’s prohibition on deceptive acts or practices. CitiMortgage, the agency stated, also violated RESPA, and the Dodd-Frank Act’s prohibition against deceptive acts or practices.
CFPB orders Citi subsidiaries to pay $28.8 million for giving the runaround to borrowers trying to save their homes