Bank selling servicing rights of about 780,000 mortgages to New Residential Investment Corp.
By Christina Rexrode
Updated Jan. 30, 2017
Citigroup Inc. on Monday said it will exit the mortgage-servicing business, turning its focus to mortgage originations.
The bank said it is selling servicing rights of about 780,000 mortgages backed by Fannie Mae and Freddie Mac to a unit of New Residential Investment Corp. New Residential, managed by an affiliate of Fortress Investment Group , said it is paying about $980 million.
Citigroup said the exit from mortgage servicing will reduce its first-quarter pretax earnings by $400 million, including a loss on the sale and other transaction costs. The bank said the move allows it to focus on originating mortgages, to cut expenses and to improve shareholder returns.
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