Halister News

(Bloomberg) -- Citigroup says it’s exiting mortgage servicing operations by end of 2018 to intensify focus on originations; move is “intended to simplify CitiMortgage’s operations, reduce expenses, and improve returns on capital.”

• Agrees to sell mortgage servicing rights, related servicing, on ~780,000 Fannie Mae, Freddie Mac loans of non-Citibank retail customers with outstanding balances ~$97b to New Residential Mortgage
• Sale subject to approval of agencies and FHFA
• Due to be completed in 1H
• Also in subservicing agreement with Cenlar FSB for remaining Citi-owned loans, other MSRs not sold to NRZ
  • Sees loan servicing transferred to Cenlar beginning in 2018
• C sees deals hurting pre-tax results by ~$400m, including a loss on sale, transaction costs, in 1Q
  • Ex items, sees minimal impact on operating revenues in 2017, with expense benefits beginning to accrue in 2018, fully realized in 2019
• NOTE: Earlier, Citigroup Said Near Exiting Servicing Mortgages Business: WSJ

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