DON'T FEEL BAD ABOUT A 590 MILLION DOLLAR SETTLEMENT WITH CITIGROUP

By
Mortgage and Lending with Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 NMLS # 6869

“Don’t Feel Bad About a 590 Million Dollar Settlement with Citigroup”

They made plenty of profit on these loans, I mean lots of money. The frustrating part, is the settlement is going to stockholders, not the individuals that were harmed by the subprime loan that they bought into.

Yes, I know there is 26 billion dollar settlement with folks that were harmed by subprime loans and part of the settlement was with CitiBank.

Citigroup settlementThese investors that won this settlement, made an investment that didn’t work out. I wonder if we should start an action to get back any money we lost on any investment we ever made.

Citigroup Will Pay $590 Million to Settle Subprime Claims

By: Paul Muolo

Citigroup late Wednesday disclosed that it will pay $590 million to settle a class action civil suit brought by investors seeking damages from the bank’s exposure to subprime mortgages.

Among other things, investors accused the top ranked mortgage lender/servicer of failing to disclose important details about its investments in subprime MBS and related securities, including CDOs.

The settlement covers Citigroup shareholders who bought stock in the bank from February 2007 to April 2008.

In 2007, a Citigroup affiliate called CitiFinancial out of Baltimore was a top 10 ranked subprime lender, according to figures compiled by National Mortgage News and the Quarterly Data Report.

In 2007 Citigroup’s investment banking division was one of the largest securitizers of subprime loans in the nation. Its strategy entailed taking A- to D loans from its own CitiFinancial affiliate and other firms and packing these nonprime mortgages into bonds.

In some cases Citigroup invested in its own MBS.

According to the law suit, investors accused the bank of concealing its “failure to write down securities tied to subprime debt.”

In a press statement Citigroup said it denies the allegations but is settling the case to avoid prolonged litigation.

image: digitalart/freedigitalphotos.net

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Joe Petrowsky, NMLS #6869

Right Trac Financial Group, Inc. NMLS #2709

110 Main St.

Manchester, Ct. 06042

Office: 860 647-7701 x116

Fax: 860 647-8940

Cell: 860 836-9294

Email: joe@righttracfg.com

www.righttracfg.com

www.joepetrowsky.com

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Joe Petrowsky does not guarantee nor is in any way responsible for the accuracy of the information provided herein, and provides said information without warranties of any kind, either expressed or implied.

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Rainer
277,387
Steven Cook
No Longer Processing Mortgages. - Tacoma, WA
- Pierce, King, Kitsap, Thurston, Mason Counties

Joe -- I love it when large corporations say they didn't do it, but are settling to avoid protracted litigation.  Usually means they did do it and there is documentation that will prove it - if it went to court.  They are cutting their losses.

 

Have a Fantastic Holiday Weekend!

Aug 31, 2012 11:35 AM #1
Rainmaker
839,552
Joshua Zargari
MJ Decorators Workshop LI staging and home decorating - Lynbrook, NY
MJ Decorators Workshop

Good afternoon Joe.

In business they don't use emotions.

Have a nice weekend.

 

Aug 31, 2012 11:50 AM #2
Rainmaker
2,160,336
Roy Kelley
Realty Group Referrals - Gaithersburg, MD
Roy and Dolores Kelley Photographs

Can you imagine where our country would be if no subprime mortgage loans had been made?

Have an outstanding holiday weekend and be sure to have your camera in hand to capture the special moments.


Aug 31, 2012 11:59 AM #3
Rainmaker
726,541
Richard & Beth Witt
RE/MAX Wittney Estates 516-795-6900 www.longislandrealestatesearch.com - Massapequa, NY
Broker/Owner RE/MAX Wittney Estates Long Island NY

Hi Joe... Wouldn't it be great if the folks could take action and win??? Oh well!! Have a great Labor Day Weekend.

Aug 31, 2012 01:55 PM #4
Ambassador
1,241,504
Debbie Reynolds
Berkshire Hathaway HomeServices PenFed Realty, Your Clarksville Real Estate Professional, 931-920-6730 - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent

Joe, It is extremely disappointing that the injured parties are not the ones getting the compensation. Things just aren't right sometimes.

Aug 31, 2012 02:22 PM #5
Ambassador
1,983,630
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages Connecticut - Middletown, CT
Your Connecticut Mortgage Expert

Joe, I never feel sorry for anyone that gets caught for doing something wrong.  I feel sorry for the rest of us that end up feeling the backlash from this stuff, because of the black eye that the industry gets.

Aug 31, 2012 03:27 PM #6
Rainmaker
981,145
Sharon Alters
Coldwell Banker Vanguard Realty - Fleming Island, FL
Your Fleming Island Relocation Agents.
Definitely, Joe. I want to start a class action law suit for some stock I bought at the top of the market for oil wells in Australia and then they hot natural gas. No wait, the company is bankrupt! Lol
Aug 31, 2012 03:57 PM #7
Rainmaker
1,870,038
Lou Ludwig
Ludwig & Associates - Boca Raton, FL
CRB, CRS, CIPS, GRI, SRES, TRC, e-PRO

Joe

Citigroup does not deserve the settle, they originated the mortgages, sold that mortgages and get paid to service the mortgage. They were not warehousing and did not own the mortgages when they went bad.

Just more tax payers hard earned money being wasted.

Good luck and success.

Lou Ludwig

Aug 31, 2012 05:21 PM #8
Rainmaker
700,676
Patricia Feager, MBA, GRI, Cert Negotiations Expert, Military Relo Prof
Dallas Premier Keller Williams Realty - Dallas, TX
The Little REALTOR® That Could

Hi Joe,

On one hand, I'd love to know that anyone who got involved with subprime loans could be compensated for their losses and emotional distress; but then again, if that did happen (which I'm sure it never will) can you imagine how many other lawsuits would follow? There would be such a domino effect. Suddenly, everybody would be suing everybody. The state of the economy would be out of control.

In some ways, it reminds me of a drug that was approved by the FDA and some people swore by it; others died. Rather than figure out what the problem was, they took the drug off the market. The company decided it would be cheaper to take the drug off the market than to try to figure out all the various combinations of other drugs people were on, or what other types of problems did the patient have when they started the drug therapy. So they decided to take the PRODUCT off the market. When the PRODUCT (like subprime) is gone, the problem will eventually go away and nobody has to know about it or get compensated either - right?

Those are my early morning thoughts... Thanks for stimulating my brain this morning. My coffee maker broke so I really needed to read this one!

Sep 01, 2012 03:50 AM #9
Rainmaker
1,158,990
Conrad Allen
Re/Max Professional Associates - Webster, MA
Webster, Ma, Realtor

Hi Joe.  Does that equal one months net income?  Way too lenient.

Sep 01, 2012 04:32 AM #10
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Joe Petrowsky

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