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Slump in Citi’s Home Lending Might Continue Into Q4

Citigroup Inc. failed to push past its prior-period mortgage production. In fact, a forward-looking indicator points to even less lending in the current quarter.

According to data in its earnings report, the New York-based financial services firm funded $7.5 billion in residential loans from July 1 through Sept. 30.

The latest activity fell short of second-quarter volume at $8.8 billion.

Yet, the New York-based financier bested the $7.1 billion in mortgages originated during the third-quarter 2014.

For the first three quarters this year, residential lending activity came to $23.3 billion.

Salable mortgage rate locks dropped to $3.9 billion from $5.0 billion in the second quarter — indicating that loan production could be worse in the final quarter of this year.

At the end of last month, Citi serviced $162.6 billion mortgage for third parties. Servicing was down from $165.0 billion as of June 30 and $173.0 billion as of Sept. 30, 2014.

Citi’s residential investment portfolio increased to $40.6 billion from $38.9 billion at the end of June and $37.6 billion at the end of September a year ago.

Thirty-day delinquency was unchanged from 0.68 percent at the end of June. On a year-over-year basis, however, delinquency was 27 basis points better.

As of Sept. 30, Citi Holdings’ third-party servicing portfolio was $36.4 billion, off from $39.2 billion accounted for at the end of June. The latest portfolio was even leaner compared to $56.0 billion at the same point last year.

On the balance sheet, Citi Holdings’ residential assets narrowed to $47.9 billion from $51.3 billion at the second-quarter’s close and $63.4 billion at the same point in 2014.

The most-recent assets consisted of $21.5 billion in home-equity loans and $26.4 billion in first mortgages.

At 5.53 percent, the 30-day or more delinquency rate on Citi Holding’s mortgage portfolio worsened by 32 BPS compared to the June-end rate. But the latest rate did manage a 64-basis-point improvement over last year’s third-quarter end rate.

Income from continuing operations before taxes fell $0.7 billion from the second-quarter 2015 to $6.2 billion at the holding-company level. Still, income rose above the downwardly revised third-quarter 2014 earnings of $5.0 billion.

Company-wide, Citi’s staffing increased by a thousand from the upwardly revised second-quarter number to 239,000 as of Sept. 30.

Citi claimed 4,000 fewer employees than at the end of September 2014.

North American branches in the global consumer banking division held steady at 779, the same amount accounted for as of June 30.

Citi Holdings claimed 272 North American branches — one location less than claimed at the end of the second quarter.

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