Citi to pay $1.125B in MBS settlement

|By:, SA News Editor

Citigroup (C) has reached a deal with 18 institutional investors regarding "private-label securitization representation and warranty repurchase claims."

The bank will "make a binding offer to the trustees of 68 Citi-sponsored mortgage securitization trusts to pay $1.125 billion to the trusts, plus certain fees and expenses."

The trusts collectively issued $59.4B worth of residential MBS. If the deal is accepted by the trustees, it would "release Citi's obligation to repurchase mortgage loans sold into the trusts, or make the trusts whole, for outstanding or potential claims for breaches of representations and warranties on the loans."