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May 2017   Volume 43, Number 5      
 

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Citigroup to Exit Mortgage Servicing Business by 2018

Citigroup Inc. plans to exit the mortgage-servicing business by the end of 2018. In a statement, the New York-based buyer confirmed that New Residential Investment Corp. agreed to pay Citigroup $950 million for servicing rights on Fannie Mae- and Freddie Mac-backed loans with $97 billion of outstanding balances.

The sale to New Residential, which is still pending regulatory approval, is expected to be completed by the first half of 2017.

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

Mortgage servicers are responsible for handling the billing and collections on home-loan payments and overseeing foreclosures. Many banks have pulled back on their servicing units as costs for the business rose and regulatory pressure increased. In March, Citigroup agreed to pay $28.8 million to settle allegations by U.S. regulators that two of the bank’s mortgage-servicing units misled borrowers.

At the end of 2016, Citigroup’s mortgage-servicing rights were worth $1.6 billion, a steep decline from $6.5 billion at the end of 2009, according to the company’s fourth-quarter earnings statement. The bank produced $371 million in fees from servicing securitized mortgages for the first nine months of last year, down from $416 million for the same period of 2015.

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In this issue:

12 Surprising Facts about Millennial Homebuyers

Cities Where Over 50 Percent of Millennials Own Homes

Citigroup to Exit Mortgage Servicing Business by 2018

House Flipping Frenzy Returns to U.S. Real Estate

Mortgage Volume Increases by 3.3 Percent as Borrowers Rush to Beat Rising Rates

Survey Shows Smart Home Devices Still in Early Adopter Phase

U.S. Home Prices Hit a 2.5-Year High

Wall Street Eyes Shopping Malls as Next U.S. Credit Crisis

Northeast Has Most New Home Starts

Landscaping Tips to Improve Curb Appeal


 


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