Citigroup C today announced that it has reached an agreement with 18
institutional investors, represented by Gibbs & Bruns LLP, regarding the
resolution of certain legacy Securities and Banking private-label
securitization representation and warranty repurchase claims. Under the
agreement, Citigroup will make a binding offer to the trustees of 68
Citi-sponsored mortgage securitization trusts to pay $1.125 billion to the
trusts, plus certain fees and expenses, for which Citi has taken an additional
charge of approximately $100 million in the first quarter of 2014. The 68
trusts covered by the agreement issued in the aggregate $59.4 billion of
residential mortgage-backed securities and represent all of the trusts
established by Citi's legacy Securities and Banking business during 2005-2008
for which Citi affiliates made representations and warranties to the trusts.
The agreement, if accepted by the trustees, would release Citi's obligation to
repurchase mortgage loans sold into the trusts, or make the trusts whole, for
outstanding or potential claims for breaches of representations and warranties
on the loans.
The company released the following statement:
“This settlement resolves a significant legacy issue from the financial crisis
and we are pleased to put it behind us.”
The agreement would not release potential investor claims relating to alleged
misrepresentations in the offering documents associated with these
private-label securitizations, nor any potential regulatory actions. Further,
the agreement does not cover mortgage loans sold through private-label
securitization trusts via Citi's consumer mortgage business in CitiMortgage,
Inc. The agreement is conditioned on, among other things, acceptance by the
trustees of the applicable trusts, and court approval, if sought by the
trustees.
Citi, the leading global bank, has approximately 200 million customer accounts
and does business in more than 160 countries and jurisdictions. Citi provides
consumers, corporations, governments and institutions with a broad range of
financial products and services, including consumer banking and credit,
corporate and investment banking, securities brokerage, transaction services,
and wealth management.
Additional information may be found at www.citigroup.com | Twitter: @Citi |
YouTube: www.youtube.com/citi | Blog: http://new.citi.com | Facebook:
www.facebook.com/citi | LinkedIn: www.linkedin.com/company/citi
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