Citi Agrees To Resolve Certain Private-Label Securitization Repurchase Claims

(RTTNews) - Citigroup Inc. (C) announced that it has reached an agreement with 18 institutional investors, represented by Gibbs & Bruns LLP, regarding the resolution of certain legacy Securities and Banking private-label securitization representation and warranty repurchase claims.

Citigroup said based on the agreement, it 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, for which Citi has taken an additional charge of about $100 million in the first quarter of 2014. The 68 trusts covered by the agreement issued in the aggregate $59.4 billion of residential mortgage-backed securities and represent all of the trusts established by Citi's legacy Securities and Banking business during 2005-2008 for which Citi affiliates made representations and warranties to the trusts.

The company noted that the agreement, if accepted by the trustees, 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.