Citibank Violated Mortgage Agreements by Not Paying Interest on Escrow, Class Action Says

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Citibank Interest Payment Class Action Lawsuit Overview: 

• Who: A husband and wife lodged a class action lawsuit against Citibank, NA. 
• Why: The plaintiffs allege Citibank did not pay interest on escrow accounts it maintained for mortgage holders.
• Where: The class action lawsuit was brought in New York federal court.

Citibank failed to pay interest on escrow accounts, in violation of their mortgage agreement, a new class action lawsuit alleges.

Lead plaintiffs Glenn and Kim Greenberg, husband and wife and co-mortgagors, say Citibank, and its subsidiary, CitiMortgage, Inc, maintain escrow accounts for its customers from which they pay property taxes and/or insurance premiums. 

The defendant collects the projected amount that the borrower will owe for tax and insurance on the mortgaged property, according to the complaint. It directly pays the taxes and insurance due on the borrower’s mortgaged property from the escrow account. 

Because the funds paid into an escrow account remain the borrower’s money, New York law requires all “mortgage investing institutions” to pay at least 2 percent interest on such funds; however, Citibank failed to do so, “while enriching itself on the free use of the funds paid into the escrow account by plaintiffs,” the class action alleges.

This failure to pay is confirmed by monthly loan statements provided to the plaintiffs by CitiMortgage, points out the plaintiff. 

Citibank Paid Escrow Interest, Then Stopped, Claims Class Action

In November 2018, Citibank transferred the servicing of the plaintiffs’ loan to its agent, Cenlar, while remaining the owner and mortgagee. During the time when Cenlar serviced the mortgage, it paid the plaintiffs interest on their escrow account, allege the Greenbergs. 

Citibank has not explained why the plaintiffs were paid the interest required by New York law and plaintiffs’ Citibank mortgage agreement after but not before November 2018, says the class action lawsuit.

Plaintiffs bring this action on behalf of themselves and Classes in New York and Maryland and seek statutory, compensatory punitive and exemplary damages, restitution or disgorgement to plaintiffs and the classes, declaratory and injunctive relief to enjoin the defendant from engaging in the unlawful described in this complaint, attorneys’ fees and pre- and post-judgment interest.

This is not the first Citibank mortgage holder to claim the company failed to pay interest on their escrow accounts. In recent years, a class action lawsuit alleging that Citibank mortgage escrow accounts are not paid interest in violation of California law was lodged. 

Learn more about an escrow payments class action investigation here (links to paid attorney advertising)! 

The plaintiffs are represented by Oren Giskan of Giskan Solotaroff & Anderson LLP and Joseph S. Tusa of Tusa P.C. 

The Citibank Interest Payment Class Action Lawsuit is Greenberg, et al. v. Citibank, N.A., Case No. 1:21-cv-08740, in the U.S. District Court for the Southern District of New York.

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