January 17, 2014

Citi cuts Fort Mill mortgage work force; 200 affected, more layoffs anticipated

Citi is closing its default mortgage service unit in the Fort Mill area, affecting up to half of the 800- to 900-person workforce.

Affected employees were notified Wednesday. A layoff of about 200 workers will happen in the first quarter of 2014 with the remainder throughout the year, said Mark Rodgers, director of public affairs for Citi.

The positions were eliminated because Citi sold its mortgage servicing rights for about 64,000 Fannie Mae residential mortgage loans, representing an outstanding principal balance of about $10.3 billion. The sale was announced Wednesday.

The sale includes the majority of delinquent loans services by CitiMortgage for Fannie Mae and represented almost 20 percent of the total loans serviced by CitiMortgage that are delinquent 60 days or more.

Fannie Mae owns the loans. A spokesman for Fannie Mae said it will use a company that specializes in high-risk, delinquent loans to service the mortgages that Citi was responsible for. The spokesman declined to name the company.

Transfer of the loans to Fannie Mae will start in the first quarter 2014 and continue into the third quarter, according to a Citi news release.

In all, Citi is cutting 950 workers from its default mortgage operations nationwide because of the Fannie Mae loan sales, Rodgers said.

The cuts in the Fort Mill area follow an August reduction of 150 employees, also in the default mortgage service units. Citi plans to close its mortgage default unit by the end of year in the Fort Mill area, Rodgers said.

The layoffs came as Citi announced its fourth quarter performance. The company saw $2.7 billion in fourth quarter net income, resulting in earnings of 85 cents per share.

The per-share earnings, however, were 9 cents less per share than what analysts predicted.

Citi’s fourth quarter revenue was $17.8 billion, missing analysts’ prediction of $18.25 billion and a 1 percent decline over the same time last year.

Citi attributed its performance to a drop in domestic mortgage refinancing activity and softness in its fixed income markets revenue, which fell 15 percent compared to the prior year.

Workers in the default mortgage service unit can apply for other job openings at Citi, Rodgers said. Those leaving are eligible for 60 days of pay, and severance pay based on their years of service. The company also plans to offer placement support to those seeking jobs.

Citi operations that will continue at the Fort Mill office are collections for One Main Financial (formerly Citi Financial), some retail banking operations and an anti-fraud unit, Rodgers said.

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