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» of homeowners across New York at greater risk of foreclosure. I intend to use every tool available to my office to hold these companies accountable under the terms of the National Mortgage Settlement." The AG's office also revealed Schneiderman sent a letter to the settlement monitor Joseph Smith and to each member of the Monitoring Committee, notifying them of his intention to sue the banks if the committee does not act. According to a statement from Schneiderman's office, he plans to ask the court to impose injunctive relief and to require strict compliance with the settlement. Bank of America issued a statement in response to Schneiderman's intent to sue. "Through March we have provided relief for more than 10,000 New York homeowners through the National Mortgage Settlement, totaling more than $1 billion. Attorney General Schneiderman has referenced 129 customer servicing problems which we take seriously and will work quickly to address. This agreement has been good for New York, and we continue using these beneficial programs to assist troubled homeowners in New York and nationally," a BofA spokesperson stated in an email. A Wells Fargo spokesperson said the bank did not have a comment at the time of publication. Cumulative CMBS Default Rate Rises in Q1: Fitch Fitch Ratings found cumulative defaults on loans held in U.S. commercial mortgagebacked securities (CMBS) moved higher in the first quarter as the office sector struggled. The U.S. CMBS cumulative default rate for fixed-rate CMBS rose to 13.6 percent in Q1 2013, up 18 basis points from the previous quarter, according to the New York-based rating agency. Fitch also reported office loans have led defaults over the past two years and maintained their lead last quarter with 55 percent of defaults by balance. The size of the loans that defaulted ranged from $1.4 million to $130.4 million. "Office will continue to lead CMBS defaults in the near term as leases signed at the height of the market are rolling into lower rent environments and tenants reduce space," said Mary MacNeill, managing director. Retail loans had the second highest share of defaults, with 29 percent of the default balance. In particular, Fitch says it remains "cautious" of retail loans for malls and shopping centers in "secondary or tertiary markets." Fitch also noted newly defaulted loans in the first quarter increased over a one-year period to $2 billion, up from $1.7 billion in Q1 2012. Citi's Earnings Improve, New TriState Program Reduces Mortgage Balances Citigroup Inc.'s earnings improved 31 percent year-over-year in the first quarter as the recovering economy helped bolster the bank's income. New York-based Citigroup reported net income of $3.8 billion on revenues of $20.5 billion in Q1 2013, an improvement over $2.9 billion in net income on revenues of $19.4 billion reported for the same quarter last year. According to the company's earnings filing, the increase "was driven by revenue growth and lower net credit losses, partially offset by higher expenses, a lower loan loss reserve release, and a higher effective tax rate." Cost of credit in Q1 was $2.5 billion, a decrease of 16 percent from year-ago levels, reflecting a $994 million improvement in net credit losses offset by a $513 million decline in net loan loss reserve releases. Citigroup's allowance for loan losses was $23.7 billion—or 3.7 percent of total loans—at the end of March compared to $29 billion for Q1 2012. While the bank's loan loss reserve release fell 44 percent from last year to $652 million, it still beat out Wall Street's expectations, showing the effect the housing recovery has had on helping to stabilize loans and securities. "Achieving consistent, high-quality earnings is one of my top priorities and these results are encouraging," said Citi CEO Michael Corbat. "During the quarter, we benefitted from seasonally strong results in our markets businesses, sustained momentum in investment banking, continued year-overyear growth in loans and deposits in Citicorp, and a more favorable credit environment. However, the environment remains challenging and we are sure to be tested as we go through the year." Separately, Citi introduced a new program that allows its New York tri-state area customers to earn rewards to pay off their mortgage. Under the new program—Citi Offset Mortgage—bank customers can use their VISIT US ONLINE @ DSNEWS.COM Citibank Day-to-Day Savings Account balances to earn rewards to bring down or "offset" their mortgage balance. The company explained that an "offset reward" is calculated each month and then used to reduce the principal balance on the customer's mortgage. For example, if a customer has a $500,000 loan with a 3.75 percent interest rate and a deposit account with $50,000, then the customer will receive a monthly "offset reward" of nearly $160. "We're constantly listening to our customers, and we understand that paying off their loans faster and paying less interest is important. With Citi Offset Mortgage, our customers also enjoy the peace of mind that they can access their savings for any need or for emergencies," said Sanjiv Das, president and CEO of CitiMortgage. "This new program is unique in that it helps our customers optimize their financial portfolio, better manage their debt, and allows their money to work harder while maintaining complete flexibility," Das added. In addition to a Day-to-Day Savings Account with Citi, customers must also have a Citibank checking account set up to automatically pay their monthly mortgage. Customers won't be penalized for withdrawing from their savings account. The program was first launched as a pilot program in 19 branches last year, but is now available to Citi customers who are interested in refinancing or purchasing a new home in the New York tri-state area. Cuomo Announces Special Program for Sandy Victims Fannie Mae and Freddie Mac are offering a relief program to victims of Superstorm Sandy who were current on their mortgage before the storm, Gov. Andrew M. Cuomo of New York announced last month. According to Cuomo's office, the program is in response to letters the New York Department of Financial Services (DFS) sent in April, which urged for a change in what Cuomo's administration called "restrictive" guidelines that could lead to a spike in mortgage payments for Sandy victims. The letters were addressed to the CEOs at Fannie Mae and Freddie Mac, as well as their regulator, the Federal Housing Finance Agency (FHFA). "In response, FHFA, Fannie Mae, and Freddie Mac have communicated to DFS that a special mortgage relief program will 101

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