CitiMortgage CEO Hints at Plans to Expand Lending

first_imgCitiMortgage CEO Hints at Plans to Expand Lending in Daily Dose, Featured, Headlines, News, Origination As mortgage lenders continue to see volumes decline as the result of a shrinking market, Citigroup is now hinting at re-entering the correspondent lending space with a renewed focus.In remarks captured by Bloomberg at the Mortgage Bankers Association’s National Secondary Market Conference in New York, CitiMortgage CEO Jane Fraser said the company is seeking out ways to step up its presence in the mortgage market, focusing largely on the “very important” correspondent segment as other banks struggle against waning loan demand and a stringent credit environment.”We want to grow,” Fraser said, adding that Citi thinks its current business is “below our natural market share.”Indeed, despite being the third biggest bank in the country by assets, Citi has failed to hold a steady place among the top five mortgage originators.While Citi’s interest in correspondent lending is a change for the company from the last few years, the bigger news is what it says about investor confidence in buying and holding closed loans, remarked JP Kelly, president of mortgage software provider OpenClose.“An increasing number of lending entities are now pursuing the correspondent business; Citi’s announcement reinforces the belief that a lot of quality loans are out there,” Kelly said.As the bank seeks to move back into the market, Fraser assured the MBA audience that Citi plans to keep a cautious approach as the government continues to move on companies for alleged violations of securities laws. In 2012, Citi agreed to a $158.3 million settlement with the Justice Department to resolve accusations it misled the government into insuring risky home loans, and the bank is now reportedly in discussions to settle other mortgage-related concerns.Still, Fraser said the bank is focused on moving forward and “is no longer reacting to the crisis.”Christina Pham, president of JMAC Lending, a wholesale lender that has worked with Citi, says the firm’s renewed focus demonstrates a greater understanding of how to approach a transforming market.“I think right now they’re getting the hang of it, so they’re comfortable to go back in aggressively,” Pham said.Scott Stoddard, CEO of lending software provider Quandis, agreed, adding that the market is ripe for new business.”Like several large organizations, Citi got caught up in accusations of being involved in bad loans and foreclosure problems… [and] scaled back in mortgages after that,” Stoddard said. “Simply put, Citi has reentered buying and investing in closed loans because the dust has settled and there is profit to be made, and with far less risk than there was during the subprime boom.”Whether Citi will be able to reclaim its old place near the top of the lender rankings remains to be seen, however, especially since it’s not the only bank looking to make a comeback.”We see the correspondent channel as only further growing, with all kinds of lending entities getting back into the business,” Kelly said. May 21, 2014 552 Views center_img Citigroup Correspondent Lending JMAC OpenClose 2014-05-21 Tory Barringer Sharelast_img

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