It’s really hard to accept the idea that Citigroup (C) in its current size and shape should be allowed to keep on going when you read stories like this:
Bloomberg: Citigroup Inc. suspended loan applications at a unit that produced half of its $115 billion in mortgages last year after a review found that some property appraisals and income-verification documents were missing.
The correspondent division, which buys loans from banks and independent mortgage firms, stopped accepting new loans at 5 p.m. yesterday and will restart July 6, Citigroup said in a June 22 letter to clients. The New York-based company said it will use the time to change procedures and fix the omissions.
“There remain key areas that fall short of our quality- control process,” according to the letter, signed by Brad Brunts, a managing director at the bank’s CitiMortgage division.
Key areas that fall short of our quality-control process?
Gee Brad Brunts, you’ve just described the entire financial crisis in one sentence. And here were on in June 2009, and they’re just now dealing with this issue of missing appraisals and income-verification docs. When a bank gets to be the size of Citigroup, it should have exemplar standars. It should be the best in the biz. Unfortunately, on a host of things, Citi’s basically the opposite.
As we noted yesterday, with its share price continuing to languish, it appears as though investors see little reward, while the bank continues pose significant risk to us, the taxpayer. With our huge stake in the company of common, voting shares, we ought to dismantle it.