An unidentified hedge fund has agreed to buy a $400 million portfolio of nonperforming residential loans from Citigroup, according to vulture fund investors that play in that market.

A spokesman for Citi's mortgage unit declined to comment. One investor said the final sale price was in the range of 50 cents on the dollar. No other details were available on the deal.

Wells Fargo is also in the market with a large NPL market, the bank confirmed to National Mortgage News.

With the Citi and Wells deals, it appears the market is seeing an increase in the willingness of some large banks to finally unload some of their delinquent residential loans but with roughly $1 trillion worth of mortgages in arrears it's still a fraction of the entire market.

"From the prices I'm seeing some of these banks are still asking too much," one west coast-based investor said.

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