Citigroup Sued Over Billions In Mortgage Debt Losses

Citigroup

Pacific Investment Management Co (PIMCO) and other investors have sued Citigroup. The group alleged that the bank failed to properly monitor toxic securities backed by more than $13.8 billion of mortgage loans. The improper monitoring of those loans resulted in $2.3 billion of losses.

A filing on Tuesday night in New York City claims Citigroup breached its duties as trustee for the 25 private-label trusts dating from 2004 to 2007 by ignoring “pervasive and systemic deficiencies” in how the underlying loans were underwritten or being serviced.

Some of the loans that backing the 25 trusts came from issuers including the now-defunct American Home Mortgage and Washington Mutual.

The lawsuit is seeking a class-action status and undisclosed penalities.

 

The case is Fixed Income Shares: Series M et al v. Citibank NA, New York State Supreme Court, New York County, No. 653891/2015.

 

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Written by Peter Mondrose

Peter Mondrose

Peter Mondrose is the Editor-In-Chief at BusinessPundit. He received his degree in Economics in 1998 and a second degree in Journalism in 2004. He has served as a financial adviser, market trader, and freelance journalist for the last 11 years. When he's not investigating market conditions and reporting on workplace news, he can be found traveling with his wife, dog, and laptop. He can be reached at PeterMondrose@BusinessPundit.com or (929) 265-0240.