Citigroup said it will be making a series of changes to its U.S. mortgage businesses that include reducing its residential mortgage assets by roughly $45 billion over the next 12 months, a 20% decrease from December 2007 levels. The bank also said it will cut the amount of new loans held in its portfolio by more than 50% over the next year. In January, Citi announced that it had formed an "end-to-end U.S. residential mortgage business" that includes origination, servicing and capital markets securitization execution. Under this umbrella business, Citi will consolidate its U.S. mortgage operations, policies and procedures, which the bank said will appropriately align its mortgage operations and exposure. Citi also said it will integrate all residential mortgage operations under the CitiMortgage name, including CitiMortgage, Citi Home Equity and Citi Residential Lending. The new platform will have a single set of product offerings with coordinated pricing and business practices, a common sales organization with a single leader for each customer segment, a consolidated middle office support structure with a common CFO, credit head and human resources lead, and staffing levels that are reflective of current market conditions, the bank said. Among changes to the bank's underwriting plans include an increase in the levels of loans sold to the GSE's or securitized to approximately 90% of production by Q3 of this year, up from 65% in 2007. CitiMortgage also said it will no longer offer mortgage loans for investment properties on three- and four-family homes and has reduced its bulk loan purchases. The company also said it has eliminated 2/28 and 3/27 ARMs as well as home equity loans behind lower FICO score first mortgages. In addition, CitiMortgage reduced the volume of second mortgage origination and reduced third party second lien loans by over 90% from a year ago.
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According to the Federal Reserve Board's latest financial stability report, persistent inflation and policy uncertainty are the primary worries for banks. Survey respondents expressed heightened anxiety over murky policy outlooks due to geopolitical turmoil and rapidly approaching domestic elections.
3h ago -
With a high proportion of fixed-rate, interest-only underlying loans, the notes have almost no amortization, and three CRE loans have standalone, investment-grade opinions.
6h ago -
The fixed-rate loans are divided into three sub-pools that relied on rating methods from the RMBS, CMBS and ABS sectors to assess their risks.
April 18 -
The House Financial Services Committee also sent to the full House two bipartisan bills, including one that would prevent large banks from opting out of having to recognize Accumulated Other Comprehensive Income in regulatory capital.
April 18 -
The portfolio does not have any meaningful originations that have completed a full repayment cycle, making the company's performance data thin.
April 18 -
Formerly of Wells Fargo, she will coordinate several key units to create a structure for a sustained capital markets program that capitalizes on recent innovation and growth in home equity finance.
April 17