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Columbia Southern University
Business, Government and Society
DBA 7035
Citigroup and Subprime Lending
Case Study Unit VII
Angel H. Collado
November 27, 2012

Citigroup is a global financial company with almost 200 years of history in the financial market and with over 100 million of clients in more than 40 countries (Citigroup.com, 2012). Citigroup is one of the most important financial companies of the world its presence is found in the mortgage industry, credit cards, personal finances and other financial products. On September of 2000 the Citigroup announced an agreement to acquire Associates First Capital Corporation in an exchange of shares valued at $31.1 billion (Baron, 2010). The Associates also represented a strong financial company with good presence in the financial market. With this acquisition Citi Financial Group got more power in the American financial market diversifying their products and adding one more as much as important called the Subprime Lending. The Subprime Lending is called to the financial practice of lending money to people with less possibilities or lower credit history locked for access in the conventional credit market, making possible the accessibility to financial products such as mortgages, credit cards, mortgage refinances, personal credits, and others offered on the market. The general perception of this practice is considered as high risk investments due to the characteristics of the borrowers. In general, Citigroup and the Associated made possible the access to the credit with higher premiums and interests generated for the transactions. As it is expected borrowers with poor credit history or with low scores is attracted to this kind of offers, many generate new engagement trying to cover old obligations, or in many cases, simply pursuing the dream of access to credit not taking in consideration the requirements and high rates of interests setting their future as failure. The moral concerns associate with subprime...
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