Bloomberg writes: Citigroup which last week admitted breaking Federal Housing Administration rules and paid a fine, also violated regulations for home loans sold to Fannie Mae and Freddie Mac, 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 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.
Hunt’s charges formed the backbone of the U.S. Justice Department’s case against Citigroup, which paid $158.3 million in a Feb. 15 settlement and admitted that it certified loans for FHA insurance that didn’t qualify. Her complaint provides additional details into the bank’s broken mortgage-processing system. In last week’s agreement, the government reserved the right to pursue criminal and other charges related to mortgages originated or underwritten by Citigroup and not insured by the FHA.
“Everyone is a little bit guilty for not keeping an eye on the processes and doing what we should have been doing,” Hunt said…..
Read more at http://www.bloomberg.com/news/2012-02-22/citigroup-defrauded-fannie-freddie-whistle-blower-claims.html
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