Description:

The Justice Department, along with federal and state partners, on July 14, 2014 announced a $7 billion settlement with Citigroup Inc. to resolve federal and state civil claims related to Citigroup’s conduct in the packaging, securitization, marketing, sale and issuance of residential mortgage-backed securities (RMBS) prior to Jan. 1, 2009.

Of the $7 billion resolution, $4.5 billion will be paid to settle federal and state civil claims by various entities related to RMBS: Citigroup will pay $4 billion as a civil penalty to settle the Justice Department claims under FIRREA, $208.25 million to settle federal and state securities claims by the Federal Deposit Insurance Corporation (FDIC), $102.7 million to settle claims by the state of California, $92 million to settle claims by the state of New York, $44 million to settle claims by the state of Illinois, $45.7  million to settle claims by the Commonwealth of Massachusetts, and $7.35 to settle claims by the state of Delaware.

Citigroup will pay out the remaining $2.5 billion of its settlement with the Department of Justice in the form of relief to aid consumers harmed by the unlawful conduct of Citigroup.  That relief will take various forms, including loan modification for underwater homeowners, refinancing for distressed borrowers, down payment and closing cost assistance to homebuyers, donations to organizations assisting communities in redevelopment and affordable rental housing for low-income families in high-cost areas.  An independent monitor will be appointed to determine whether Citigroup is satisfying its obligations.  If Citigroup fails to live up to its agreement by the end of 2018,  it must pay liquidated damages in the amount of the shortfall to NeighborWorks America, a non-profit organization and leader in providing affordable housing and facilitating community development.

Funding Title:    DOJ – Citigroup Settlement for Misleading Investors About Securities Containing Toxic Mortgages

Agency Name:    Department of Justice  and Citigroup

Funding Instrument Type:     Grant

Express Language for Legal Aid:    Yes

Target Population:    Consumers harmed by the unlawful conduct of Citigroup, underwater homeowners, distressed borrowers and homebuyers, and low-income families

Expected Number of Awards:

Cost Sharing or Matching Requirement:    No

How to Apply:      If Citigroup fails to live up to its agreement by the end of 2018,  it must pay liquidated damages in the amount of the shortfall to NeighborWorks America.

Current Closing Date for Applications:

Estimated Total Program Funding:           $7,000,000,000.00

Award Ceiling:

Award Floor:   

Eligible Applicants:    NeighborWorks America

Priority Consideration:    

Policy and Regulations on Use of Funding:

Settlement Agreement

Consumer Relief

Current/Past Funding Recipients:

Samples of Successful Application:

Link to Full Announcement:    http://www.justice.gov/opa/pr/2014/July/14-ag-733.html

Contact Information:    Residential Mortgage-Backed Securities (RMBS) Working Group, http://www.stopfraud.gov/index.html 

Categories: Consumer, DOJ, Express Language for Legal Aid, Financial, Foreclosure Settlements, Housing, IOLTA Programs, New Opportunities, Non-profit Organizations, Pass-Through Funds/ Block Grants, Victims of Crime