Citigroup reported single-family mortgage originations of $21.8 billion in the fourth quarter, up 17% from the prior period.

However, the nation's fourth largest residential lender said its North American retail banking revenues came it at $1.4 billion, down 2% from the third quarter "primarily driven by lower mortgage revenues due to lower re-financing gains."

Citigroup also revealed that it sold $1.5 billion of delinquent mortgages, bringing its total NPL sales to $4.8 billion for the full year. (PennyMac Mortgage Investment Trust has been a buyer of some of its offerings.)

Overall, the giant bank reported $1.3 billion in profits for the fourth quarter and earnings of $10.6 billion for the full year.

Citigroup chief financial officer John Gerspach noted that the assets of Citi Holdings fell by 15% during the fourth quarter to $359 billion.

Since the beginning of 2010, Citi Holdings has reduced its first mortgage portfolio by almost 20% to $80 billion and its second mortgage portfolio by 14% to $44 billion. "We continue to manage down these portfolios," Gerspach said.

He said delinquencies on first mortgages have fallen for the past five quarters. He said the decline is due to asset sales and trial modifications converting to permanent modifications.
Three-quarters of Citicorp's modifications meet the Home Affordable Modification Program specifications. "The first [Home Affordable Modification Program] mods have been on the books for 12 months and to date are exhibiting re-defaults of less than 15%" Gerspach said.

The CFO also noted that Citigroup recognized $235 million in losses due to mortgage repurchase and indemnifications in the forth quarter, ending the year at $969 million in repurchase reserves.
The bank currently has repurchase claims pending on 4,600 mortgages. Citicorp has already paid claims on 7,600 mortgages over the past three years. "Based on our current expectations, we believe claims volume should peak in the later part of 2011," the CFO said.

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