(Update 1: added Citi comment)
is scaling back sharply on its third-party originations, and may poosiby be looking to shutter its wholesale mortgage lending efforts altogether, according to sources that spoke with HousingWire on Tuesday. A copy of an email from an account executive at Citi to brokers was obtained by HW that suggested the lender was moving to eliminate its entire outside sales force.
"We just had an internal conference call where it was announced that Citi Wholesale is eliminating its outside sales force," the email read. "Citi will also drastically reduce the number of brokers it does business with but I do not have access to that list."
A source with more information told HW that Citi was reducing its broker network from more than 9,500 brokers nationwide to just 1,000, and that brokers would be managed via in-house representatives going forward. A key manager at Citi told HW on condition of anonymity that the move reflected both market conditions and a desire to "whittle down" brokers to the best-performing group given the current market.
Spokesman Mark Rodgers told HousingWire on Tuesday night that Citi remained committed to its best brokers. "We are redefining our wholesale business model through the application of decision analytics and have identified approximately 1,000 (versus the 9,500 we have today) strategic business partners," he said. "The basis of this new model is dependent on doing business with the right brokers via a low-cost, high-touch approach and will therefore leverage telesales and a smaller account executive footprint."
"I hope I'm in that group [of 1,000]," one broker told HW on condition of anonymity. "We need to have somewhere to send loans, and their underwriters have been among the best."
Account executives in Citi's wholesale mortgage division will leave the company, effective Friday. "If you've got loans in the pipeline I recommend that you find out very soon who your processor and underwriter are as I will not have access to that information after Thursday," said the email from a Citi account executive to brokers.
Nearly every major commercial bank has been limiting or has eliminated its wholesale origination channel in the past 10 months; included on that list is Bank of America Corp. (BAC)
, although it acquired a substantial wholesale channel with its July acquisition of Countrywide Financial Corp.
Disclosure: The author held no relevant positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.