Hundreds of production employees are being laid off from Citigroup Inc.’s mortgage unit as a result of declining originations. But some of the impacted employees might land in servicing as the company moves to expand the department in light of its recent settlement with federal regulators.
A statement from the New York-based company indicated that the layoffs are taking place at its CitiMortgage Inc. unit.
Around 400 jobs are impacted by the decision.
The layoffs will occur at sites in Ann Arbor, Mich.; Dallas; Las Vegas; San Antonio, Texas; and St. Louis. But despite the layoffs, Citi said the sites will remain open.
“Due to ongoing challenges in the housing industry, including decreased consumer demand for new mortgages and refinancing, CitiMortgage is reducing its loan sales and fulfillment staffs” the statement said. “This will allow the company to better align staffing with current business needs.”
Residential originations at Citi fell to $14.1 billion in the first quarter from $21.8 billion in the final three months of last year.
Affected employees are being encouraged to apply for other jobs at the company.
After an assessment, some of the impacted employees could land in the company’s default servicing division.
Citi recently said it would increase the default servicing staff by around 500 positions. The move is in response to the recent settlement between federal banking regulators and the biggest mortgages servicers over foreclosure practices. Consent orders issued require the servicers to immediately correct deficiencies that were identified in fourth-quarter regulatory reviews.
Staff members who don’t find other jobs at Citi will be provided with counseling, outplacement service and a severance package based on their tenure, position and other factors.
