Citigroup’s mortgage unit has agreed to pay $158.3 million to settle charges that it defrauded a U.S. government home loan insurance program.

In the civil suit and settlement filed simultaneously on Wednesday, government prosecutors alleged that CitiMortgage, a subsidiary of the bank, submitted ineligible mortgages to the Federal Housing Administration’s Direct Endorsement Lender Program, part of the Department of Housing and Urban Development.  That program provides insurance that pays out if a mortgage goes into default.

Prosecutors said that over a period of six years, starting in 2004, more than 30 percent of the 30,000 mortgages CitiMortgage certified for insurance went into default.  That has resulted in HUD paying out nearly $200 million in insurance claims.

As a part of the settlement, the bank “admits, acknowledges, and accepts responsibility” for failing to comply with government requirements and submitting loans that did not meet the standards of the insurance program.

In a written statement, Preet Bharara, the U.S. Attorney for the Southern District of New York, said, “For far too long, lenders treated HUD’s insurance of their mortgages like they were playing with house money. In fact, they were playing with other people’s money and other people’s homes.”

Mark Rodgers, a spokesman for Citigroup, said in an email statement,  "We are pleased to resolve this matter,” and added "We take our quality assurance processes seriously and have pro-actively undertaken process improvements to ensure that they are as robust as possible.”

CitiMortgage is the latest bank to be targeted by federal prosecutors over submitted mortgages to the government-backed insurance program.  Bank of America last week agreed to pay $1 billion to settle similar charges.