Today @citibank launched homeownersupport.com 2 help connect struggling homeowners w/ those who have been through it. Love being part of it
— Frank Eliason (@FrankEliason) December 17, 2011
When a bank tries to “reach out” to anyone, it is usually trying to accomplish one of two things: (1) selling more loans, or (2) trying to make itself look good. With its new HomeownerSupport.com, Citibank is apparently trying to do both. It’s kind of like a burglar putting up a Facebook page for his victims to “connect” with one another, talk about what wasn’t stolen, and share their upcoming vacation plans.
Customer service Twitter star Frank Eliason has his work cut out for him on this one.
— Chen Mingi (@chen_mingi) December 17, 2011
Edit: I should point out that in yesterday’s post, I noted that federal district court Judge Jed Rakoff called Citigroup a “frequent offender” of securities laws.
Citigroup agreed to pay $285 million to settle a fraud lawsuit filed by its investors, who were understandably irate that Citigroup was selling them toxic assets while betting against those same assets. The lawsuit was not related to all the damage Citigroup did to honest, hardworking Americans with that same fraud. Nobody sues for that kind of thing in this country.
Despite accepting taxpayer’s bailout money, Citigroup refuses to show sympathy to consumers.
A local parking attendant bought a television on credit with Citigroup back in 2007. At the time of purchase, the receipt mentioned a deferred interest promotional offer, with no further explanation on the receipt or from the salesperson.
The consumer made monthly payments well in excess of the minimum payment, in order to pay off the loan in full before the 18-month interest free period ended. The consumer’s last payment was $11 short of paying off the entire loan.
Because the consumer did not pay off the loan, he was subject “Penalty Pricing,” interest dating back to date he purchased the TV in the amount of $887. Citigroup is also charging him 30% interest on that debt.
The Minnesota Attorney General’s office contacted Citigroup and got nowhere, receiving a letter from Citigroup that said “we expect the same from all our clients no matter where they come from . . . .”
Heartless behavior from a company that should be thanking taxpayers, not screwing them.
$11 mistake earns 0.0% sympathy from Citigroup | StarTribune
According to a report from Safe Credit Card Project:
Allen Harkleroad is an angry debtor who blogs about his experience dealing with debt collectors. One of his creditors, Citibank, sued him on a defaulted credit card debt. After they started the lawsuit, though, Citibank offered to loan Allen another $5,000.
It is obvious why they need a bailout; the monkeys in charge of consumer lending are hellbent on making dumb loans. But tell me again, why are we spending billions to rescue these financial geniuses?
Mann Bracken Claims to be suing me on behalf of Citibank, So Citibank Tries to Give me More Money! | Five Million Dots
In a deal brokered by the feds, Citigroup has agreed to acquire the majority of Wachovia, the latest bank to fail. From CNN:
Citigroup will acquire the banking operations of Wachovia for $2.2 billion in an all-stock deal, following much speculation over the weekend about the fate of the nation’s fourth-largest bank.
Last week, Ben Popken at Consumerist suggested that the repeal of the Glass-Steagall Act in 1999 by a Republican Congress was a gift to Wall Street that encouraged banks to issue the sketchy mortgages that, failing spectacularly across the country, have dragged the economy into the toilet.
From the comments, it looks like Citibank’s HELOC freeze is causing more than just a few bounced checks. Reader Barbara Clark says Citibank reported the loan as suspended on her credit report, turning it into a major negative account and trashing her credit.
I just spoke with a homeowner who bounced a check to her tree service because Citibank suspended her home equity line of credit before notifying her. When she finally received a notice from Citibank in the mail, it suggests that (PDF link) Citibank is apparently suspending home equity lines of credit nationwide due to falling home values. The same thing apparently happened to Nina at Queercents just over a week ago.
The Citibank HELOC contract apparently gives them the right to suspend or reduce the credit limit of accounts when the homes value drops too far. But Citibank based its decision on a general finding that “home values in your area, including your home value, have significantly declined,” not a specific appraisal.
Further, Citibank has not simply reduced the available credit limit to compensate (which would be difficult, since it does not actually know the home’s value), but has suspended the account entirely. Andthe biggest problem, as my caller demonstrated, is that already-written checks will bounce, because Citibank is suspending accounts before it notifies its customers. Surprise!
Obviously, since a HELOC is tied to the value of the home, lenders should be able to reduce the available credit if the home value declines. But they should also (1) have to show the home value actually has declined, and (2) notify its customers before it suspends their accounts.