CitiMortgage is greatly reducing its wholesale mortgage business, according to several Account Executives who will be laid off as a result.
While Citigroup hasn’t formally addressed the issue, it is believed that the company will cut roughly 500 jobs and shut down several loan centers nationwide as a result of continued deterioration in the credit markets.
The company will also whittle down the number of mortgage brokers it works with to the most lucrative 1,000, dropping about 8,500 others in the process.
Going forward, the company is expected to fulfill its wholesale business in St. Louis and Dallas via telesales, moving away from its costlier outside Account Executive model.
The focus will be on reducing portfolio assets by refinancing loans into GSE and FHA saleable securities (conforming mortgages) and working with at-risk and delinquent borrowers to get them back on track.
Back in mid-June, CitiMortgage cut a number of wholesale jobs, but remained committed to the out-of-favor channel.
Today’s news really comes as no surprise, considering the fact that Citi said it would focus on direct-to-consumer lending back in March.