In the despicable category, companies run by big banks like Citi take advantage of struggling homeowners who try to hang on to their homes. Now CitiMortgage and CitiFinancial Servicing will pay the price, a whopping $28.8 million in a settlement with the Consumer Financial Protection Bureau (CFPB).
CFPB Director Richard Cordray said, “Citi’s subsidiaries gave the runaround to borrowers who were already struggling with their mortgage payments and trying to save their homes. 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.”
About 20,000 borrowers learned that they could defer their payments, but they weren’t told that the interest would add up and come due immediately at the end of the deferment period. This added to their loans and violated deceptive lending laws.
CitiFinancial Servicing did not cancel credit insurance bought by 7,800 consumers whose loans went into default. Instead, between July 2011 and April 30, 2015, it continued to collect the money.
On the other hand, it prematurely canceled credit insurance for some customers.
And then, it sent inaccurate information to the credit reporting companies.
As a consequence of all this, the CFPB order CitiFinancial Servicing to pay $4.4 million in restitution to consumers and pay a $4.4 million civil penalty.
CitiMortgage will pay $17 million in restitution directly to 41,000 consumers who received confusing information about what documents they needed to provide to pay off their mortgages. The CFPB said, “Many of these documents had nothing to do with a borrower’s financial circumstances and were not actually needed.”
The CFPB ordered CitiMortgage to freeze foreclosures imposed during its bad practices and to pay a civil fine of $3 million.
If you think CitiMortgage or CitiFinancial Servicing misled you, sit tight. The companies should notify you within 60 days. If you don’t hear from them you can contact the Consumer Financial Protection Bureau: http:www.consumerfinance.gov, or call 855-411-2372.
We will point out that the Consumer Financial Protection Bureau may come under fire from the Trump Administration. Republicans have criticized the bureau’s work and want to take away some of its power or kill it entirely.
If you think this valuable bureau should continue, contact your U.S. representative or your U.S. senator.
Here’s where to find your representative: http://www.house.gov/htbin/findrep
Here’s where to find your senator: