Citigroup may pay $7 billion to resolve U.S. mortgage probes: source
A Citigroup representative declined comment. A Justice Department spokeswoman did not respond to requests for comment.
A settlement of around $7 billion for Citigroup would be higher than analysts had expected based on the bank’s mortgage securities business.
Some Wall Street analysts had previously estimated that Citigroup likely had about $3 billion of reserves set aside for a related settlement. U.S. authorities had demanded more than $10 billion last month, Reuters reported.
Talks between U.S. authorities and Citigroup stalled last month after both sides stood far apart on a settlement figure and the Justice Department had prepared to sue the bank.
The bank is scheduled to report second-quarter results on Monday. Analysts, on average, have estimated the company would earn $3.4 billion.
U.S. Attorneys offices in Brooklyn and Colorado have been investigating the bank as part of a larger task force probing faulty mortgage securities that helped fuel the housing bubble in the mid-2000s and contributed to its collapse.
JPMorgan Chase & Co paid $13 billion in November to resolve a range of probes from the task force, in a deal that U.S. authorities said would serve as a template for other banks. Bank of America Corp has also been in negotiations to resolve similar investigations.
