The bank had more than 200 violations of a five-year limit for holding REO properties, according to a consent order. Citi was warned repeatedly of the violations before the OCC moved to fine the bank.
New York has set a six-year statute of limitation to bring charges under the Martin Act. The deadline issue has been a bone of contention in a court case between the state attorney general and Credit Suisse.
Higher-priced mortgages are a regulatory designation based on the comparison of the annual percentage rate on a mortgage with the average prime offer rate, which tracks rates offered to prime borrowers.
After the transaction closes, business-purpose lending investments will account for more than 15% of Redwood's investment portfolio, up from a 4% share.
The new MBS differs in some ways from previous expanded-credit issuance from Annaly, including a reduced reliance on mortgages from Banc of California and an increase in investment-property loans.