Citigroup Forgot To Compensate 23,000 Consumers For Abusive Foreclosure Practices, Sending Checks Now

Several years ago, Citigroup reached a deal with federal regulators that required the company to provide compensation for nearly 380,000 people affected by foreclosure abuse. Only the lender didn’t exactly follow through, failing to send checks to 23,000 consumers.

Bloomberg reports that Citigroup is preparing to right that wrong by sending the overlooked consumers checks totaling $20 million.

The compensation – which ranges from a few hundred dollars to as much as $125,000 per consumer – was a key requirement of the company’s settlement with the Federal Reserve and the Office of the Comptroller of the Currency to resolve the lender’s widespread foreclosure abuses.

In all, the consumers still awaiting monetary relief make up just 6% of those who were originally owed money by Citigroup.

Back in 2012, Citigroup – along with 14 other banks – agreed to the settlement in order to resolve allegations that they mishandled loan papers, robo-signed legal documents, and improperly initiated foreclosures without reviewing each individual case.

While the settlement was meant to provide relief to consumers wrongly pushed into foreclosure, Bloomberg reports that it also gave compensation to consumers who weren’t harmed by the banks’ shady practices.

When a case-by-case review of misdeeds proved to be too tedious and expensive, regulators required the banks to pay $10 billion to borrowers and loan-assistance programs.

Most of the payments were mailed last year, with Citigroup making cash payments of $300 million to consumers and $500 million to foreclosure-prevention efforts.

“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.

Citigroup Checks in the Mail After Bank Bungles Foreclosure Deal [Bloomberg]