Citigroup Inc.’s home-lending unit has reached two separate agreements that will effectively get it out of the mortgage servicing business.
A statement Monday from the New York-based firm said CitiMortgage Inc. has reached an agreement to sell MSRs and the related servicing.
The buyer in the transaction is
New Residential Mortgage LLC.
Borrowers on the loans are not Citibank retail customers.
The sale is subject to approval by Fannie, Freddie and the Federal Housing Finance Agency.
The sale is expected to close by June 30.
A second, subservicing agreement has Citi handing over servicing on the remaining Citi-owned loans and other MSRs to Cenlar, which will provide core operations, customer service and default operations.
Citi noted that it will retain
loans to its retail banking clients, though they will be included in the subservicing contract.
Loan servicing is expected to be transferred to Cenlar beginning in 2018.
“Citigroup announced it has executed agreements that will accelerate the transformation of the U.S. mortgage business by effectively exiting servicing operations by the end of 2018 to intensify focus on originations,” the statement said. “The strategic action is intended to simplify CitiMortgage’s operations, reduce expenses and improve returns on capital.”
The financial institution said it
is working to transfer as many employees as possible with the MSRs and operations.
CD Davies, president and chief executive officer of O’Fallon, Missouri-based CitiMortgage, said in the statement that the unit
will continue to originate loans for current and new clients.”
Citi reported a third-party mortgage servicing portfolio of $161.2 billion as of Sept. 30, 2016. In addition, it owned $72.6 billion in residential assets.