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Citibank Pays to Settle Charges of Mortgage Fraud

Chris Goodney/Bloomberg via Getty Images(NEW YORK) -- One of the nation's biggest banks agreed Wednesday to pay tens of millions of dollars to settle charges of mortgage fraud.

For more than six years Citibank's residential mortgage business engaged in what court records call "reckless lending" that cost American taxpayers millions and drove up rates of foreclosure and eviction.  Citi has now agreed to pay nearly $160 million to settle charges it "failed to implement even the most basic quality control."

Loans Citi certified as eligible for government insurance, prosecutors said, were fraudulent, deficient and "never should have been insured."

Taxpayers are paying for Citi's misconduct and prosecutors expect additional losses in the future.

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