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Why Bad News Can't Stop Citi Investors Today

John Grgurich
July 1, 2013

After beating out Friday's market correction, two and half hours into trading today, Citigroup (NYSE: C) stock continues its strong performance: up a big 2.2%, despite breaking news it owes Fannie Mae almost $1 billion over bad mortgages it sold the government-run housing giant.

We've got it covered
Financial Times is reporting that Citi will pay Fannie $968 million for "breaches of representations and warranties on 3.7 million residential first mortgage loans sold to Fannie Mae that were originated between 2000 and 2012." Citi said the payout will be covered by the bank's mortgage-repurchase reserves.

"This agreement resolves substantially all potential future repurchase claims from them for loan originations from 2000 to 2012." So said CitiMortgage CEO Jane Fraser, in the same statement announcing the settlement. 

Foolish bottom line
Investors seem to not just be shrugging off this news today, but charged up by it, if the stock's performance relative to its peers' is any indication.

JPMorgan Chase (NYSE: JPM) is up only 1.2% today. Up by 1.9%, Bank of America (NYSE: BAC) s