Citigroup to sell US mortgage servicing division

New Residential agrees to pay $950M for rights to $97B portfolio

TRD MIAMI /
Jan.January 30, 2017 12:45 PM

Citigroup’s Michael Corbat (Credit: Citigroup)

From the New York website: Citigroup is leaving the mortgage servicing business amid declining revenues and stricter regulations.

The bank agreed to sell the right to service $97 billion in securitized residential loans backed by Fannie Mae and Freddie Mac to New Residential Investment Corporation for $950 million. In a separate deal, Cenlar FSB said it would take over the servicing of all remaining mortgages. Citigroup expects to have completely exited that business by 2018.

Mortgage servicers collect payments and manage foreclosures on behalf of mortgage bondholders in return for fees. But Citigroup’s servicing fee income has been dropping steadily in recent years, from more than $1.6 billion in 2009 to less than $600 million in 2015, according to Bloomberg.

“The strategic action is intended to simplify CitiMortgage’s operations, reduce expenses and improve returns on capital,” Citigroup said in a statement.

Earlier this month, the bank agreed to pay $28.8 million in fines over allegations that its mortgage servicing business misled homeowners.

As banks increasingly exit the mortgage servicing business, non-banks increased their market share to 24 percent in 2015, from 6.8 percent in 2012. [Bloomberg]Konrad Putzier 


Related Articles

arrow_forward_ios

Mortgage servicing demand jumps across US amid housing slowdown

Duane Morris signs $17M lease at Citigroup Center in downtown Miami

White House attorneys investigating whether loans to Kushner Companies violated law: report

Settlements for mortgage insurance kickbacks reach $39M in Florida, NJ

Florida sues Ocwen alleging mishandled mortgages, illegal foreclosures

Citi lends $28M to Hilton Garden Inn, Holiday Inn Express

Citigroup, Cantor lend $190M to Eden Roc owners

Citi renews 125K sf lease at Miami Center

arrow_forward_ios