The good news is that a seven-year-old consent order against Citigroup Inc. has been terminated. The bad news is that a subsidiary was hit with a fine over its handling of mortgage documents.
In 2011, a consent order was issued against Citi and subsidiary CitiFinancial Inc. requiring the firms to take steps to address mortgage servicing deficiencies.
In the second half of 2014, Citi began taking steps to get CitiFinancial out of the mortgage servicing business. The following year, as part of the exit, lost note affidavits were executed.
But, according to a Federal Reserve Board civil money penalty order issued Friday, CitiFinancial employees sometimes signed affidavits representing that they had personal knowledge about loan documents when, in fact, they didn’t.
“CitiFinancial states that lost note affidavits that may have been impacted by the conduct described above were, where necessary, replaced by CitiFinancial with properly executed and notarized affidavits before being used,” the order states.
In addition, affidavits were not signed in the presence of a notary.
CitiFinancial completed its exit from servicing in September 2017.
As a result of the affidavit processing deficiencies, an $8.6 million penalty was issued against the company by the Fed.
However, the Fed also said it terminated the 2011 enforcement action.
“The termination of this action was based on evidence of sustainable improvements,” the Fed’s statement said.
