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Citigroup Inc. or Citi is an American multinational investment bank and financial services corporation incorporated in Delaware and headquartered in New York City. The company was formed by the merger of Citicorp, the bank holding company for Citibank, and Travelers in 1998; Travelers was spun off from the company in 2002.
Citibank, N.A. is the primary U.S. banking subsidiary of financial services multinational Citigroup. Citibank was founded in 1812 as the City Bank of New York, and later became First National City Bank of New York. The bank has 2,649 branches in 19 countries, including 723 branches in the United States and 1,494 branches in Mexico operated by its subsidiary Banamex. The U.S. branches are concentrated in six metropolitan areas: New York, Chicago, Los Angeles, San Francisco, Washington, D.C., and Miami.
Predatory lending refers to unethical practices conducted by lending organizations during a loan origination process that are unfair, deceptive, or fraudulent. While there are no internationally agreed legal definitions for predatory lending, a 2006 audit report from the office of inspector general of the US Federal Deposit Insurance Corporation (FDIC) broadly defines predatory lending as "imposing unfair and abusive loan terms on borrowers", though "unfair" and "abusive" were not specifically defined. Though there are laws against some of the specific practices commonly identified as predatory, various federal agencies use the phrase as a catch-all term for many specific illegal activities in the loan industry. Predatory lending should not be confused with predatory mortgage servicing which is mortgage practices described by critics as unfair, deceptive, or fraudulent practices during the loan or mortgage servicing process, post loan origination.
A collateralized debt obligation (CDO) is a type of structured asset-backed security (ABS). Originally developed as instruments for the corporate debt markets, after 2002 CDOs became vehicles for refinancing mortgage-backed securities (MBS). Like other private label securities backed by assets, a CDO can be thought of as a promise to pay investors in a prescribed sequence, based on the cash flow the CDO collects from the pool of bonds or other assets it owns. Distinctively, CDO credit risk is typically assessed based on a probability of default (PD) derived from ratings on those bonds or assets.
Ameriquest was one of the largest United States sub-prime mortgage lenders until its dissolution in September 2007. Among the first mortgage companies employing computers to solicit prospective borrowers and hasten the loan application process, Ameriquest was accused of predatory lending practices by United States banking regulators. The company was notable for its promotion of the stated income loan, whereby potential borrowers were allowed to claim income without verification of employment. The proliferation of lending to customers with marginal creditworthiness proved to be not only a key factor leading to the 2007 subprime mortgage financial crisis, but also a catalyst to Ameriquest's own demise.
Roland E. Arnall was an American businessman and diplomat. As the owner of ACC Capital Holdings, he became a billionaire with Ameriquest Mortgage. Additionally he funded, financed and was the visionary and co-founder of the Simon Wiesenthal Center, and from 2006 until shortly before his death he was the United States Ambassador to the Netherlands.
GMAC ResCap, Inc. was a residential mortgage loan originator and servicer based in Minneapolis, United States. As a result of its exposure to subprime lending during the subprime mortgage crisis, the company filed for bankruptcy protection in 2012 and underwent liquidation in December 2013.
A structured investment vehicle (SIV) is a non-bank financial institution established to earn a credit spread between the longer-term assets held in its portfolio and the shorter-term liabilities it issues. They are simple credit spread lenders, frequently "lending" by investing in securitizations, but also by investing in corporate bonds and funding by issuing commercial paper and medium term notes, which were usually rated AAA until the onset of the financial crisis. They did not expose themselves to either interest rate or currency risk and typically held asset to maturity. SIVs differ from asset-backed securities and collateralized debt obligations in that they are permanently capitalized and have an active management team.
The American subprime mortgage crisis was a multinational financial crisis that occurred between 2007 and 2010 that contributed to the 2007–2008 global financial crisis. The crisis led to a severe economic recession, with millions of people losing their jobs and many businesses going bankrupt. The U.S. government intervened with a series of measures to stabilize the financial system, including the Troubled Asset Relief Program (TARP) and the American Recovery and Reinvestment Act (ARRA).
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The subprime mortgage crisis impact timeline lists dates relevant to the creation of a United States housing bubble and the 2005 housing bubble burst and the subprime mortgage crisis which developed during 2007 and 2008. It includes United States enactment of government laws and regulations, as well as public and private actions which affected the housing industry and related banking and investment activity. It also notes details of important incidents in the United States, such as bankruptcies and takeovers, and information and statistics about relevant trends. For more information on reverberations of this crisis throughout the global financial system see 2007–2008 financial crisis.
Chain of Blame: How Wall Street Caused the Mortgage and Credit Crisis is a 2008 book about the subprime mortgage crisis in the United States by investigative journalists Paul Muolo of National Mortgage News and Mathew Padilla of the Orange County Register. The book has an accompanying website with some excerpts, author biographies and a roundup of events in the subprime mortgage crisis that occurred after the book was printed.
The government interventions during the subprime mortgage crisis were a response to the 2007–2009 subprime mortgage crisis and resulted in a variety of government bailouts that were implemented to stabilize the financial system during late 2007 and early 2008.
This article is a subordinate article to the subprime mortgage crisis. It covers some of the miscellaneous effects of the crisis in more detail, to preserve the flow of the main page.
Government policies and the subprime mortgage crisis covers the United States government policies and its impact on the subprime mortgage crisis of 2007-2009. The U.S. subprime mortgage crisis was a set of events and conditions that led to the 2007–2008 financial crisis and subsequent recession. It was characterized by a rise in subprime mortgage delinquencies and foreclosures, and the resulting decline of securities backed by said mortgages. Several major financial institutions collapsed in September 2008, with significant disruption in the flow of credit to businesses and consumers and the onset of a severe global recession.
Michael Hudson is a Pulitzer Prize-winning American investigative journalist. He is currently head of investigations at the Guardian US.
Many factors directly and indirectly serve as the causes of the Great Recession that started in 2008 with the US subprime mortgage crisis. The major causes of the initial subprime mortgage crisis and the following recession include lax lending standards contributing to the real-estate bubbles that have since burst; U.S. government housing policies; and limited regulation of non-depository financial institutions. Once the recession began, various responses were attempted with different degrees of success. These included fiscal policies of governments; monetary policies of central banks; measures designed to help indebted consumers refinance their mortgage debt; and inconsistent approaches used by nations to bail out troubled banking industries and private bondholders, assuming private debt burdens or socializing losses.
The 2007–2008 financial crisis, or the global financial crisis (GFC), was the most severe worldwide economic crisis since the Great Depression. Predatory lending in the form of subprime mortgages targeting low-income homebuyers, excessive risk-taking by global financial institutions, a continuous buildup of toxic assets within banks, and the bursting of the United States housing bubble culminated in a "perfect storm", which led to the Great Recession.
In re Citigroup Inc Shareholder Derivative Litigation, 964 A 2d 106 is a US corporate law case, concerning the standard under Delaware law for the duty of loyalty among directors' duties.
References
- ↑ "Ameriquest closes, Citigroup buys mortgage assets". Reuters. September 1, 2007. Retrieved January 20, 2020.
- ↑ Branch closure
- ↑ LA Times article on ACCCH and Citigroup, retrieved 3/11/2007
- 1 2 3 Road to Ruin: Mortgage Fraud Scandal Brewing [ permanent dead link ] May 13, 2009 by American News Project hosted by The Real News
- ↑ "Financing the inauguration". USA Today. January 16, 2005. Retrieved May 25, 2008.
- ↑ "Some question inaugural's multi-million price tag". USA Today. January 14, 2005. Retrieved May 25, 2008.
- ↑ Drinkard, Jim (January 17, 2005). "Donors get good seats, great access this week". USA Today. Retrieved May 25, 2008.
