citimortgage closes foreclosure unit in south carolina, sells to fannie mae
Posted in the Columbia Forum
#1 Jan 18, 2014
Citigroup Inc., is cutting 950 jobs in default mortgage servicing after selling some business to Fannie Mae.
The bank agreed to sell servicing rights "collection rights" for about 64,000 Fannie Mae residential first-mortgage loans back to the government-backed firm... The loans had an unpaid principal balance of about $10.3 billion, Citigroup said.
The dismissals include 200 in Fort Mill, South Carolina, and about 50 in Hagerstown, Maryland, said Mark Rodgers, a Citigroup spokesman. The New York-based bank is shuttering its default-servicing operations in those two locations, Rodgers said today in a phone interview. He declined to provide the locations of where the other 700 cuts would occur.
Mortgage servicers handle the billing and collections on home-loan payments, and oversee foreclosures.
An additional 600 job cuts may occur by year-end in Hagerstown, with another 180 in Fort Mill, said a person familiar with the bank’s plans, who asked for anonymity because the numbers may change. About 400 of those in Hagerstown are work-at-home employees, the person said.
THE MORTGAGE FORECLOSURE RIGHTS WERE SOLD TO FANNIE MAE
#2 Jan 18, 2014
CITIMORTGAGE CLOSES FORT MILL, SC FORECLOSURE UNIT, SELLS MORTGAGE SERVICING RIGHTS TO FANNIE MAE
Effort marks Citi's move to shed potential liability over foreclosure practices
Citigroup Inc., is cutting 950 jobs in default mortgage servicing after selling foreclosure business to Fannie Mae.
Citi agreed to sell servicing rights "collection rights" and the right to foreclosure on about 64,000 Fannie Mae owned residential first-mortgage loans and sold the foreclosure rights back to Fannie Mae The loans had an unpaid principal balance of about $10.3 billion. The unusual transaction was announced, with Citi reaching a definitive agreement with Fannie Mae. The sale includes delinquent loans serviced by CitiMortgage for Fannie Mae. Nearly all of the loans transfered are delinquent.
The job losses include 200 in Fort Mill, South Carolina, and about 50 in Hagerstown, Maryland, CitiMortgage is shuttering its Foreclosure default-servicing operations in those two locations, the CitiMortgage servicing unit was responsible for foreclosures.
An additional 600 job cuts may occur by year-end in Hagerstown, with another 180 in Fort Mill.
Citigroup paid Fannie Mae to limit its liability related to the Foreclosure servicing. The deal “substantially resolved pending and future compensatory fee claims related to Citi’s Foreclosure servicing practices on these loans. Compensatory fees typically refer additional fees Fannie Mae may choose to levy on a lender/servicer, such as CitiMortgage when certain set standards are not met.
Compensatory fees can be assessed for delays in the Foreclosure process, late filing of a final request for reimbursement, and other timeline-related matters.
The sale includes the loans in Foreclosure and serviced by CitiMortgage for Fannie Mae owned loans. The transfer will begin immediately. The massive servicing transfer would take as long as two quarters to complete.
CitiMortgage no longer has the right to foreclose on the Fannie Mae owned loans.
#5 Jan 19, 2014
CitiMortgage said servicing and foreclosing the loans has grown increasingly difficult because of growing regulatory requirements. The move should help alleviate pressure on Citi’s default platform
Fannie Mae — which is short for the Federal National Mortgage Association — is a government-controlled company that helps provide money for the U.S. housing market by buying residential mortgages and packaging pools of those loans for sale to investors, according to The Associated Press
#6 Jan 19, 2014
FANNIE MAE ACQUIRES FORECLOSURE RIGHTS ON FANNIE MAE OWNED LOANS FROM CITIMORTGAGE
CITIMORTGAGE NO LONGER HAS FORECLOSURE RIGHTS
Citigroup Inc. says it plans to close a Hagerstown unit that employs about 650 people servicing home loans that have gone into default.
Nearly 50 jobs will be cut by the end of March as the company sells the rights to foreclose, mostly on behalf of Fannie Mae, about 64,000 defaulted mortgages
He said Citigroup will end all mortgage foreclosure default servicing operations in Hagerstown by the end of the year
Citigroup also plans to close a foreclosure default mortgage service unit near Fort Mill, S.C., in a move that could affect up to half of the 850 workers there
Rodgers said the Hagerstown positions to be cut by March are among 950 jobs the company is eliminating across the country, including in Las Vegas, Phoenix and St. Louis.
Regulatory requirements have made it difficult for CitiMortgage to foreclose on and service the default loans.
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