Delaware will receive a chunk of Citigroup’s multi-billion dollar settlement stemming from the 2008 housing crisis.
Citi agreed to pay $7 billion to the U.S. Justice Department for allegations that the banking giant sold bad mortgage-backed securities to investors, contributing to the massive collapse of the housing market and launching the nation into the worst economic recession since the Great Depression.
According to Attorney General Beau Biden’s office, the First State will receive $17 million from the settlement, of which $10 million will be made available in direct relief to Delaware homeowners in the form of mortgage modifications and forgiveness of second mortgages. The state will use the other $7 million to reimburse government entities that also suffered losses.
“Our financial system only works when everyone plays by the rules,” Biden said. “The housing crisis was a manmade disaster that did not have to happen. The funds we have secured have helped thousands of Delaware families avoid foreclosure, strengthen communities hit hard by the housing crisis and reimburse taxpayers. Our work seeking accountability and helping Delaware homeowners is not finished.”
Biden’s office has spent the past three years securing more than $130 million in housing-related settlements, including a $19 million settlement with JP Morgan Chase last November.