CFPB Penalizes Citi Companies on Servicing

In its first enforcement action under the new Trump Administration, the Consumer Financial Protection Bureau (CFPB) penalized CitiFinancial Servicing and CitiMortgage Inc. for what it described as “giving the runaround to struggling homeowners seeking options to save their homes.”

The CFPB claimed that the companies violated the Real Estate Settlement Procedures Act (RESPA) and the Dodd-Frank Act by engaging in deceptive acts or practices in regard to mortgage servicing, including the withholding of information and charging insurance that should not have been levied. Under the penalties, CitiMortgage is being told to pay an estimated $17 million to compensate consumers plus a civil penalty of $3 million, while CitiFinancial Services is being ordered to refund approximately $4.4 million to consumers and pay a civil penalty of $4.4 million.

“Citi’s subsidiaries gave the runaround to borrowers who were already struggling with their mortgage payments and trying to save their homes,” said CFPB Director Richard Cordray. “Consumers were kept in the dark about their options or burdened with excessive paperwork. This action will put money back in consumers’ pockets and make sure borrowers can get help they need.”