The Justice Department's investigations into recent mortgage-lending practices of large banks are not showing any signs of slowing down. Citigroup is the latest one facing a lawsuit by the Justice Department for issues surrounding their mortgage-lending.
Bank of America is currently facing similar lawsuits filed by both the Justice Department and the Securities Exchange Commission. In 2013, JPMorgan Chase & Co. agreed to pay a $13 billion settlement after an investigation similar to the ones forming the basis of the lawsuits against Citigroup and Bank of America.
The government said that Citi failed to tell investors that more than 70 percent of the mortgages backing the investment were written by mortgage brokers outside the banks' network, making them much more vulnerable to default. Only a selected group of investors were made aware of this practice leaving the rest without knowledge of this heightened risk.
Please see the link below to the rest of the story at stltoday.com
http://www.stltoday.com/business/local/justice-department-preparing-to-sue-citigroup/article_75726e78-4e3a-5978-8065-b6e48231f9d9.html
Bank of America is currently facing similar lawsuits filed by both the Justice Department and the Securities Exchange Commission. In 2013, JPMorgan Chase & Co. agreed to pay a $13 billion settlement after an investigation similar to the ones forming the basis of the lawsuits against Citigroup and Bank of America.
The government said that Citi failed to tell investors that more than 70 percent of the mortgages backing the investment were written by mortgage brokers outside the banks' network, making them much more vulnerable to default. Only a selected group of investors were made aware of this practice leaving the rest without knowledge of this heightened risk.
Please see the link below to the rest of the story at stltoday.com
http://www.stltoday.com/business/local/justice-department-preparing-to-sue-citigroup/article_75726e78-4e3a-5978-8065-b6e48231f9d9.html
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