Monday, October 18, 2010

Foreclosure problems avoided? Citigroup Earns $2.2 Billion in Third Quarter -

Citigroup Earns $2.2 Billion in Third Quarter - "Citigroup executives are hoping they have sidestepped the foreclosure mess. The bank’s mortgage division overhauled its loan-servicing practices about 18 months ago in anticipation of mounting foreclosures. It bolstered its employee training and buttoned-up its documentation practices, giving executives confidence that they may have avoided the so-called “Robo-signing” problems plaguing rivals like Bank of America, GMAC, and Chase.

“The integrity of Citi’s foreclosures process is sound,” said John Gerspach, Citigroup’s chief financial officer during a conference call with journalists. “We have not identified any system issues.”

Still, the bank bolstered its reserves tied to mortgage-related litigation. Mr. Gerspach said the bank had added about $322 million during the third quarter to cover the potential costs of faulty mortgages it might be obligated to repurchase from Fannie Mae, Freddie Mac and private insurers. JP Morgan Chase set aside about $1 billion last week."

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