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By Adrian Provost | Broker in 30305

Citigroup Accused of defrauding Fannie Mae & Freddie Mac

Citigroup has been accused by a whistle-blower of violating regulations for home loans sold to government mortgage giants Fannie Mae and Freddie Mac, according to Blooomberg News.
Citigroup allegedly “defrauded, falsified information or misled federal government entities” in selling and securing insurance for mortgages which had not been properly appraised, according to the complaint, which was filed in Manhattan federal courts in August by Sherry Hunt, a Citigroup quality-assurance vice president, and unsealed yesterday.
Hunt’s accusations are a focal point of a case being mounted against the bank by the U.S. Justice Department, Bloomberg said. The department reserved the right to pursue further criminal charges against Citigroup after the bank admitted breaking Federal Housing Administration rules last week.
“Everyone is a little bit guilty for not keeping an eye on the processes and doing what we should have been doing,” Hunt said. “Managers have to take ownership of their area, know what’s going on and make sure they’re doing the right thing.”
A Citigroup spokesperson responded to the complaint, saying: “We take our quality-assurance processes seriously and have proactively undertaken process improvements to ensure that they are as strong as possible.”

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via the Real Deal & Bloomberg via Crain’s
images courtesy of talkingbiznews.com

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