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Citigroup Said to Get California Subpoena Over Mortgage Deals

The California Attorney General's Office subpoenaed Citigroup Inc. after Attorney General Kamala Harris’s May announcement that she had set up a mortgage-fraud task force to investigate “every
step” of the mortgage process from lending to securitization. Photographer: Jin Lee/Bloomberg
The California Attorney General's Office subpoenaed Citigroup Inc. after Attorney General Kamala Harris’s May announcement that she had set up a mortgage-fraud task force to investigate “every step” of the mortgage process from lending to securitization. Photographer: Jin Lee/Bloomberg

Aug. 5 (Bloomberg) -- Citigroup Inc., the third-biggest U.S. bank, was subpoenaed by the California Attorney General’s Office over mortgage securitization, a person familiar with the matter said.

Attorney General Kamala Harris, who is investigating mortgage fraud, is seeking information from the New York-based bank on its practices, said the person, who wasn’t authorized to speak publicly about the matter and didn’t want to be identified.

The subpoena comes after Harris’s May announcement that she had set up a mortgage-fraud task force to investigate “every step” of the mortgage process from lending to securitization.

Shum Preston, a spokesman for Harris, and Mark Costiglio, a Citigroup spokesman, declined to comment yesterday on the subpoena.

The subpoena was reported earlier yesterday by the Los Angeles Times.

Harris is part of a group of state attorneys general and federal officials that is negotiating a nationwide settlement with U.S. banks over their foreclosure and mortgage-servicing practices. Citigroup is one of the five banks involved in those talks.

Attorneys general in New York, Delaware and Massachusetts are also conducting investigations into mortgage practices of banks as the settlement negotiations continue.

To contact the reporter on this story: David McLaughlin in New York at dmclaughlin9@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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