Citigroup Inc. reported quarterly residential mortgage fundings sank, delinquency jumped and its servicing portfolio declined. The company took a massive charge on the value of its mortgage securities.
Mortgage originations totaled $36.6 billion during the third quarter, the parent of CitiMortgage and CitiFinancial said in its earnings report today. Volume tumbled from $46.2 billion the prior period.
While fundings at the New York-based company were higher than $35.8 billion reported for a year earlier, last year's number's don't reflect production from ABN AMRO Mortgage Group Inc., which Citigroup acquired earlier this year. ABN AMRO's production was $10.9 billion in the fourth quarter 2005, the last time the company independently reported residential volume -- indicating that Citigroup's consolidated originations were actually off around $10 billion from last year.
The financial behemoth said its third party servicing portfolio was $575.1 billion on Sept. 30, falling from $585.3 billion in the second quarter.
Residential delinquency surged to 1.81 percent for $3.4 billion from 1.38 percent for $2.5 billion on June 30, 2007, according to the data.
Third quarter net income of $2.4 billion sank from $6.2 billion the prior quarter and $6.6 billion a year earlier. Earnings reflected $1.56 billion in pre-tax losses on the value of subprime mortgage-backed securities warehoused.
"This was a disappointing quarter, even in the context of the dislocations in the subprime mortgage and credit markets," Citi Chairman and Chief Executive Officer Charles Prince said in an announcement. "A significant amount of our income decline was in our fixed income business, where we have a long track record of strong earnings, and this quarter's performance was well below our expectations."