New York ? Citigroup Inc. and government regulators said Friday they are close to a $200 million settlement of claims that one of the banking giant’s companies manipulated people into buying overpriced mortgages and credit insurance.

The negotiations were confirmed by Citigroup lawyer Andrew Sandler and Cathy MacFarlane, a spokeswoman for the Federal Trade Commission.

The settlement is expected to include a $200 million payment by Citigroup, a source familiar with the negotiations said on condition of anonymity.

According to a lawsuit filed by the FTC last year, Associates First Capital Corp., bought in 2000 by Citigroup, got consumers to consolidate their debts into a single loan with the promise of lower monthly interest payments.

The loans, however, allegedly came with substantial fees.

The FTC also said Associates made borrowers unknowingly purchase credit insurance products by automatically including them in monthly loan payments.