Citibank to Pay $7.8M to Settle Escrow Account Complaints
June 24, 2019
Citibank will reimburse thousands of California homeowners over a legal dispute involving unpaid, overdue interest on escrow accounts. CitiMortgage, the home lending arm of Citibank, has agreed to pay $7.8 million to settle claims that the bank didn’t pay the required interest payments on escrow accounts, which are used to pay property taxes and fees that borrowers owe. In California, servicers are required to pay 2% interest on any money held in escrow accounts.
Some 94,483 homeowners accused CitiMortgage of failing to pay interest on their escrow accounts, dating back to July 1, 2014. CitiMortgage has not admitted to any wrongdoing as part of the settlement, but the agreement represents the 2% interest on all the affected borrowers. CitiMortgage also vowed to ensure that interest on escrow accounts will be paid going forward, according to the settlement. “This is California consumers’ money, and the [Department of Business Oversight] is pleased CitiMortgage has agreed to abide by the law,” says Manuel Alvarez, California’s commissioner of business oversight.
California Department of Business Oversight and “CitiMortgage to Pay $7.8 Million to California Borrowers for Not Paying Interest on Escrow Accounts,” HousingWire (June 20, 2019)
Updated: October 23, 2020