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Citi reaches settlement in home equity suit

Thousands of borrowers sued over reductions or suspensions of HELOCs

Citigroup Inc. announced last week that it has settled a lawsuit brought by some of its borrowers over the suspension or reduction of home equity lines of credit (HELOCs).

Plaintiffs filed the suit in January 2009, claiming that in 2008 Citigroup had begun to suspend or reduce HELOCs for some of its borrowers. The suit says the financial institution was pursuing a "thinly-veiled, unlawful attempt to limit its exposure to the risk of collapse in the United States housing market and to rid itself of below-market interest rate loans."


Cathleen Flahardy

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