Goodbye to AMCs – Citi to Pay $7 Billion
Did Citigroup Get Off Easy With $7 Billion Penalty?
Citigroup will pay $7 billion to resolve claims it misled investors who purchased shoddy mortgage-backed securities that helped lead to the financial crisis six years ago, Reuters reported July 14. The deal includes the largest civil fraud penalty ever levied by the U.S. Department of Justice. The multi-billion-dollar settlement is more than twice what many analysts expected but less than the $12 billion the government sought in negotiations with Citigroup.
All those who argue about the causes of the real estate crisis cannot discount yet another billion dollar settlement. Over and over again we see large settlements for mortgage securities fraud, where the problem was not with the appraisals, but the crooked financiers who manipulated the system, stealing money from homeowners all across the country. While appraisers are still being punished for the sins, big banks obviously have ample funds to pay these fines and continue with business as usual, while appraisers are being regulated to death. Every day more skilled appraisers are leaving the business while AMC’s steal profits and do little if anything to improve the home buying system. It’s time to take AMC’s back to the pre HVCC days where they can earn a market share the fair way, rather than by government intervention. It’s time to get the government out of the appraisal industry. Let’s says goodbye to AMC’s, and hello to sanity back in the appraisal industry.
An excerpt from MotherJones:
The Citi deal is one of several lukewarm settlements the government has entered into with banks in recent years over financial crisis-related wrongdoing. In November, JPMorgan Chase agreed to pay a record $13 billion for selling toxic mortgage products in the run-up to the financial crisis. Some experts say the fine should have been 22 times higher.