Money to help struggling homeowners
Mon July 14, 2014
NY gets $182M in Citigroup fine
New York State is getting $182 million as part of a $7 billion settlement against Citigroup.
The long awaited deal between federal prosecutors and Citigroup settles allegations that Citi knew it was selling mortgage-backed securities that were about to go bad, but said nothing about it to investors.
Citi is the second bank to settle with the government to avoid a lawsuit. In 2008 Citigroup received $45 billion in federal bailouts. They did not plead guilty in today's settlement. Citi shares jumped today with news of the settlement and a strong earnings report.
$92 million of New York's share will go directly into the state's general fund. That's in addition to nearly $5 billion in other fines collected from banks in recent months. Lawmakers will decide what to do with the money next year.
New York Attorney General Eric Schneiderman says another $90 million of the Citi fine will go to help for struggling homeowners.
"The housing counseling and legal services networks we set up have already helped about 30,000 families in New York and 7,000 families on Long Island," Schneiderman says.
The money will be used to write down principles, lower interest rates, and offset down payments and closing costs for first time homebuyers. Schneiderman adds that homeowners might not know they are eligible and should contact his office to find out.
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