Citigroup Decides to Exit Warehouse Mortgage Lending
National Mortgage News reported Monday morning that Concord, Calif.based First Collateral Services -- Citigroup's warehouse mortgage division -- will either be sold or closed, making it the latest largest bank to flee from third-party originations amid a historic downturn in mortgage banking. As of Monday morning, no notice regarding the company's future was posted on First Collateral's Web site, and no formal announcement was made by the company. Citigroup, the nation's fifth-largest loan originator, posted $151.9 billion in production during 2007. An unknown percentage of that amount was derived from warehouse funding, although it should be noted that Citi's market presence during the past year has grown largely due to an increased focus on retail originations. The nation's largest financial institution has been stung badly during the mortgage crisis, most recenly posting a $9.8 billion loss for the fourth quarter, driven by more than $17 billion in subprime-related write-downs.