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What Citi’s move toward digitalization means for mortgage lenders

And why now?

Monday, CitiMortgage announced it entered into an agreement with Digital Risk and Black Knight to form its new single digital mortgage origination platform.

The new front-end digital originations platform will be powered by LoanFX from Digital Risk, a provider of digital technology platforms and services, and the new loan originations system will run on LoanSphere from Black Knight.

Citigroup played a major role in housing after the turn of the century and into the housing boom years, however, after the market crashed, the bank was left to pay up $7 billion for bad mortgages, including defrauding investors with mortgage securities.

However, the bank is now beginning to turn a new page as it increases its role in the mortgage market once again.

Early in 2017, Citi announced it was leaving the mortgage servicing business. The bank then saw its servicing drop a significant 26.7% from last year’s $235.6 billion portfolio to $172.6 billion in the third quarter of 2017. But despite announcing it is leaving servicing, CitiMortgage remains the No. 8 servicer in the U.S. by portfolio volume.

However, HMDA data from 2016 shows that unlike Bank of America, JPMorgan Chase and Wells Fargo, CitiMortgage does not fall into the top 10 when it comes to mortgage originations. The bank ranks No. 21 in total number of loans at 51,538, but ranks No. 11 by annual loan volume at $20.7 billion.

With this new move into the digital space, Citi is increasing its ability to become a major player in the mortgage industry, and could even soon enter the top 10 ranks of top mortgage lenders.

“These systems will represent an entirely digital acquisition capability for those clients that choose to self-serve, as well as a curated white-glove service capability for our loan officers in person, over the phone, or digitally through mobile or web,” said David Smith, CitiMortgage head of originations operations.

“We will also be able to speed the approval process and provide employment, income and asset data instantly for many of our customers,” Smith told HousingWire. “Also, we will be able to provide real time updates, disclosures, and documents throughout the process in whichever way the client prefers, for any product and through any channel.”

But why did the bank choose now to improve its digital offerings? The bank explained that technology has now progressed to a point of sufficient differentiation and capabilities.

“We have closely observed advances in technology capabilities, both in large incumbents like Black Knight and with newer entrants like Digital Risk,” Smith said. “We believe the technology has progressed to the point of sufficient differentiation and capabilities to drive a unique client experience that resonates with our brand.”

And one expert explained that increased technology has moved from “nice to have” to “must have.”

“The digital mortgage movement is a direct response to market and consumer demands for highly functional, easy to use and cost-effective solutions that dramatically improve the mortgage application and fulfillment process from where it is today,” said Leo Loomie, Digital Risk senior vice president.

“Consumers expect a seamless digital mortgage experience that still allows for a human touch when required, and originators need a platform that provides efficiency while also complying with a dynamic regulatory environment,” Loomie told HousingWire. “We believe the digital mortgage has moved from a ‘nice to have’ to a ‘must have’ and originators that don’t have a digital roadmap will be left behind.”

Photo credit: TungCheung /

3d rendering of a row of luxury townhouses along a street

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