The Justice Department and Citigroup are reportedly close to a deal to settle allegations it defrauded investors on billions of dollars worth of mortgage securities before the financial crisis hit. Citi (C) may pay $7 billion to put the probe behind it. The New York Times (NYT) is reporting Citi is expected to pay roughly $4 billion in cash. The remainder of the $7 billion would include so-called soft dollar penalties, including mortgage modifications and other forms of relief to homeowners, and possibly payments to state attorneys general involved in the case. The Ne York Times also reports Bank of America (BAC) will be the next in line to face the Justice Department. TheStreet's Susannah Lee has the details from Wall Street.

More from Video

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

Jim Cramer: The 10-Year Yield Could Go to 2.75%

Jim Cramer: The 10-Year Yield Could Go to 2.75%

Elon Musk's Twitter Tirade Is the Dumbest Thing on Wall Street

Elon Musk's Twitter Tirade Is the Dumbest Thing on Wall Street

Replay: Jim Cramer on the Markets, 10-Year Yield, Oil Prices and Foot Locker

Replay: Jim Cramer on the Markets, 10-Year Yield, Oil Prices and Foot Locker

Video: You Could Live in a Ritz-Carlton or St. Regis Home

Video: You Could Live in a Ritz-Carlton or St. Regis Home