Subprime Lenders | featured news

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.

Across the country, banks and other lenders are still being stingy in providing credit to ordinary consumers. Only the most financially stable of Americans can secure mortgages. Small businesses are having trouble getting loans. Credit card access is restricted.

The new center of U.S. mortgage lending is a nondescript office building in the American heartland, far from the California subprime lenders and the New York investment banks that drove the housing market into a bust.

Wells Fargo & Co and the Department of Justice are negotiating to settle allegations that the bank illegally targeted African-Americans for expensive subprime loans, according to a source familiar with the matter.

Citigroup is positioning its mainly subprime CitiFinancial consumer lending unit to grow—and thus to be sold more easily.

In early 2008, Cheryl Ann Montero, a California mortgage broker, held a series of free seminars in the clubhouse of the Lone Tree Golf Course in Contra Costa County, a suburban area near San Francisco. The attendees, homeowners facing foreclosure, were desperate for a rescue from their woes. Using a PowerPoint presentation, Montero delivered one.

Several U.S. federal investigations into subprime lenders involve possible insider trading before announcements of negative news about the lender, a Securities and Exchange Commission member said on Friday.