Citigroup, Housing Market | featured news

A Manhattan federal judge on Monday signaled he will not rubber-stamp Citigroup Inc's proposed $590 million settlement of a shareholder lawsuit accusing it of hiding tens of billions of dollars of toxic mortgage assets.

Citigroup Inc said quarterly profit plunged on a $4.7 billion write-down of its stake in a brokerage operated by Morgan Stanley, but mortgage lending increased and capital markets results rebounded.

Citigroup said on Wednesday that it had agreed to pay $590 million to settle a class action lawsuit brought by shareholders who contended that they had been misled about the bank’s exposure to subprime mortgage debt on the eve of the financial crisis.

Federal regulators charged a Citigroup unit with negligence Wednesday, saying it misled investors about an investment product it used to bet against them as the housing market deteriorated. Citigroup agreed to pay a settlement of $285 million, which will be distributed to investors, the Securities and Exchange Commission said.

JPMorgan Chase & Co. and Citigroup Inc. are halting home foreclosures while the Obama administration develops its plans to help the U.S. housing market.