Citigroup ‘Defrauded’ Fannie, Freddie: Whistle-Blower

[xchrom]

http://www.bloomberg.com/news/2012-02-22/citigroup-defrauded-fannie-freddie-whistle-blower-claims.html

Citigroup Inc. (C), which last week admitted breaking Federal Housing Administration rules and paid a fine, also violated regulations for home loans sold to Fannie Mae (FNM) and Freddie Mac (FRE), according to a whistle-blower’s complaint.

The bank “defrauded, falsified information or misled federal government entities” by selling or securing insurance for mortgages with defects such as improper appraisals and paperwork errors and not reporting them as required, Sherry Hunt, a Citigroup quality-assurance vice president, said in her complaint, which was unsealed yesterday. It was filed under the False Claims Act in federal court in Manhattan in August.

For Citigroup, the third-largest U.S. bank by assets, the high defect rates could be costly. It might be forced to buy back substandard mortgages sold to government-controlled Fannie and Freddie, who buy or guarantee most U.S. mortgages.

Under the Feb. 15 settlement with the U.S. on FHA loans, Citigroup will pay $158.3 million. The Justice Department reserved the right to pursue criminal and other charges related to mortgages originated or underwritten by Citigroup and not insured by the FHA.

[TheMadMonk]

1. BULLSHIT! Fannie and Freddie were into the fraud up to their necks. /nt

[LiberalEsto]

3. Citi, Fannie & Freddie are all fraudsters

Birds of a feather....

[Overseas]

2. K&R