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WASHINGTON The U.S. Consumer Financial
Protection Bureau said on Monday it had fined subsidiaries of
Citigroup Inc $28.8 million for giving “the runaround to
borrowers” on mortgage servicing, by keeping borrowers in the
dark about options to avoid foreclosure or making it difficult
for them to apply for relief.
CitiMortgage will pay an estimated $17 million to compensate
wronged consumers, as well as a civil penalty of $3 million, the
CFPB said. CitiFinancial Services will refund approximately $4.4
million to consumers, and pay a civil penalty of $4.4 million.
The CFPB said the subsidiaries neither admit or deny the
findings in the consent orders. The company’s public affairs
office was not immediately available to comment.
“Citi’s subsidiaries gave the runaround to borrowers who
were already struggling with their mortgage payments and trying
to save their homes,” CFPB Director Richard Cordray said in a
statement. “Consumers were kept in the dark about their options
or burdened with excessive paperwork.”
The penalties come less than a week after the CFPB, a
federal watchdog for protecting individuals against fraud in
lending, sued the country’s largest student loan servicer,
Navient Corp, for similarly confusing its customers
over options with their loans.
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