Newsroom

January 30, 2017

Citigroup exiting mortgage-servicing market

Citigroup Inc. announced Monday that it will exit the mortgage-servicing business and instead focus on mortgage originations. The bank said this allows it to cut expenses – something other banks are also doing because of increased regulatory scrutiny and costs, The Wall Street Journal reported.

WSJ reported that the bank is selling servicing rights for about 780,000 mortgages backed by Fannie Mae and Freddie Mac to a unit of New Residential Investment Corp. This deal requires approval from Fannie Mae, Freddie Mac and the Federal Housing Finance Agency.

"As more banks move out of the mortgage-servicing market, more credit unions and non-depository institutions are gaining ground in mortgage originations and servicing," said NAFCU Regulatory Affairs Counsel Ann Kossachev.

A March 2016 Government Accountability Office report found that non-depository institutions upped their share of the mortgage-servicing market from 6.8 percent in 2012 to 24.2 percent in 2015. Furthermore, the total share of all residential mortgages serviced by credit unions increased from about 3.1 percent in the first quarter of 2008 to about 5.7 percent in the third quarter of 2015, according to another GAO study.

NAFCU recently added mortgage servicing compliance resources to website, including the consolidated regulatory text for the 2016 mortgage servicing rules.