CitiMortgage plans to leave the mortgage servicing business by 2018
CitiMortgage, the branch of Citigroup Inc. devoted to providing mortgages, is officially backing out of the mortgage servicing business. By the end of 2018, it will be focused entirely on creating new loans, with the goal of simplifying and streamlining their business to maximize profits.
CitiMortgage sold the mortgage servicing rights for roughly 780,000 mortgages to New Residential Mortgage LLC in early 2017. The rest of their existing loans are to be subserviced by Cenlar FSB, starting in 2018.
What does this mean for customers?
For most customers, the changes will be minor. Your mortgage will still be owned by CitiMortgage. New customers will still be able to apply for loans at any of Citibank’s 700 US locations. You can also complete a significant portion of the application process on the Citibank website.
In fact, you probably won’t notice the change at all. Mortgage servicing happens mostly behind the scenes: the acceptance and recording of payments, calculating variable interest rates, negotiations for modifications of mortgage upon default, and supervising the foreclosure process. Usually these people are presented simply as customer service employees, but they are technically employed by another company.
Mortgage servicing companies have grown more popular with lenders as regulations have become more difficult to keep up with. Many speculate that CitiMortgage is making this move to protect themselves from these changing regulations, as it was fined for $28.8 million dollars in January 2017. They have also faced several other lawsuits related to their mortgage servicing.
CitiMortgage does plan to transfer many of their employees to Cenlar FSB along with their mortgages, but this move should improve customer service and keep CitiMortgage out of trouble with the law.
There may be some difficulties during this transition, but Citigroup has said they are fully committed to helping both customers and employees transition smoothly.