Saturday, September 3, 2011

Citigroup Exposure To Federal Housing Finance Agency Lawsuit Is Modest

Citigroup once again was on the receiving end of bad press when it was named as one of the 17 organizations sued by the U.S. government over losses in subprime mortgage bonds. The negative publicity was out of proportion to Citigroup’s exposure, which was $3.5 billion. Of the 17 organizations named in the lawsuits only four others were sued for less.

The lawsuits were filed by the Federal Housing Finance Agency (FHFA), which is the government entity that oversees Fannie Mae and Freddie Mac. The lawsuits allege the named organizations sold bonds backed by mortgages that should have never been packaged into securities. The lawsuits cover a total of $196.165 billion in securities.

In contrast to Citigroup, Bank of America was sued for a total of $57.453 billion (BAC $6 billion, Countrywide $26.6 billion, Merrill Lynch $24.853 billion) and JPMorgan Chase was sued for $33 billion.

The following is a listing of the 17 named in the lawsuits and the dollar amount (in billions) of securities in question.
• Ally Financial $6
• Bank of America $6
• Countrywide (unit of BofA) $26.6
• Merrill Lynch (unit of BofA) $24.853
• Barclays Plc $4.9
• Citigroup $3.5
• Credit Suisse $14.1
• Deutsche Bank AG $14.2
• First Horizon National Corp. $0.883
• General Electric Co. $0.549
• Goldman Sachs Group $11.1
• HSBC $6.2
• JPMorgan Chase & Co. $33
• Morgan Stanley $10.58
• Nomura Holdings Inc. $2
• Royal Bank of Scotland $30.4
• Societe Generale $1.3
• Total: $196.165

Disclosure: I am long Citigroup

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