Citigroup Exiting Business of Servicing Mortgages

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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