MIAMI - Some homeowners in South Florida who have mortgages with Citigroup may see the amount of their loans or interest rates reduced due to a deal with the Justice Department.
Citigroup announced Monday that it will pay roughly $7 billion to settle a federal investigation. The feds said bank's risky subprime mortgages helped bring on the financial crisis that pushed the economy into the worst recession since the 1930s.
The bank, one of America's largest, is set to provide $2.5 billion in consumer relief. This will include principal reduction, forbearance for residential loans and financing for affordable apartments starting 2018. This could help to keep rents low in South Florida.
At a news conference Monday,, Attorney General Eric Holder said the bank's behavior had "shattered lives and livelihoods throughout the country and around the world."
Citigroup leadership told investors that despite the settlement the financial institution is getting good healthy loan growth and experiencing revenue momentum in Latin America franchises.
CEO Michael Corbat said the settlement ends all pending civil investigations related to its handling of mortgage-backed securities. CFO John Gerspach told investors that there was ongoing revenue growth in Latin America.
The news comes at a time when the real estate market in South Florida is showing some signs of improvement. Wells Fargo, one of Citigroup's rivals, recently reported signs that mortgage lending was back up. Andrew Martquardt, a bank analyst at Evercore Partners, said the uptick in loan activity was promising.
The Associated Press and CNN contributed to this report.
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