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Citi
said it would sell its mortgage servicing rights on about
780,000 Fannie Mae and Freddie Mac loans of non-Citibank retail
customers to New Residential Mortgage LLC (NRZ).
The remaining Citi-owned loans and other mortgage servicing
rights not sold to NRZ are expected to be transferred to loan
servicing provider Cenlar FSB [CENLR.UL] in 2018.
The lender said it expected these deals to hurt first-quarter
pretax results by about $400 million, including a loss on sale
and certain related transaction costs.
The move is intended to simplify CitiMortgage's operations,
reduce expenses and improve returns on capital as the company
focuses on mortgage originations.
CitiMortgage services mortgage loans for Citibank and
government-sponsored entities such as Fannie Mae and Freddie
Mac.
Citigroup's mortgage units, including CitiMortgage, were fined
$28.8 million last week for keeping home borrowers in the dark
about options to avoid foreclosure and making it difficult for
them to apply for relief.
(Reporting by Nikhil Subba in Bengaluru; Editing by Martina
D'Couto)
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