Government Audit Shows Citigroup Neglected To Pay Nearly $20 Million

Two years after Citigroup Inc. was punished for widespread foreclosure abuses and still owes TARP bailout money to taxpayers, is finally getting around mailing settlement checks to 23,000 of its customers for foreclosure abuses.

The bank neglected to pay about 23,000 borrowers who were owed compensation and is now preparing to pay them about $20 million — in amounts ranging from a few hundred dollars to as much as $125,000.

Citigroup In Hot Water

Under the agreement with regulators, the bank and other banks agreed to pay $10 billion to resolve allegations that they mishandled loan papers and robo-signed legal documents, improperly initiating hundreds of thousands of home foreclosures without reviewing each individual case. Paying borrowers was a key requirement of settlements with the Federal Reserve and the Office of the Comptroller of the Currency.

“We want to make sure that everyone eligible for compensation under the agreement receives what they are due,” Mark Rodgers, a Citigroup spokesman, said in an e-mailed statement to Bloomberg.

Last year, the bank agreed to pay $7 billion to settle government claims that it misled investors about the quality of mortgage-backed bonds it sold and in February, the bank said in a filing with the SEC that it continues to cooperate with regulators on “inquiries concerning Citigroup’s mortgage-related conduct and business activities, as well as other business activities affected by the credit crisis.”