Partially government-owned megabank Citigroup has joined the growing list of big banks that are changing the way they handle the business of kicking people out of their homes.
Unlike its rivals, Citi is plowing ahead with foreclosures, but it has stopped initiating new business with a Florida law firm that is under investigation by the state’s attorney general for improper foreclosure filings. Citi said it’s not having the firm, the Law Offices of David J. Stern, handle new proceedings. Bloomberg reports:
“Pending the outcome of the AG’s investigation, Citi is not referring new matters to this firm,” the New York-based bank said in an e-mailed statement. Citigroup services loans for government-sponsored entities, such as Fannie Mae and Freddie Mac. Stern “was approved by the GSEs during the time in which it was retained by Citi,” the bank said.
Citi also maintains that it doesn’t have much reason to believe that its employees have been cutting corners, and for that reason it is not putting a halt to foreclosures.
Attorneys general in 40 states are expected to announce a joint investigation into foreclosures by America’s big banks, according to Bloomberg. Major mortgage players Bank of America, JPMorgan Chase, Goldman Sachs, Ally’s GMAC and PNC have all gone one further than Citigroup (C) by calling widespread halts to foreclosures while they check to make sure their paperwork is in order.