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July 28, 2014

CitiGroup Wants to Increase Its Mortgage Business

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CitiGroup Wants to Increase Its Mortgage Business

Citigroup Inc. is buying up home loans from other lenders as it seeks to increase its share in the mortgage business.

"We want to grow," Jane Fraser, the chief executive officer of Citi Mortgage, told attendees at the Mortgage Bankers Association secondary market conference.“We think today we are below our natural market share” based on the size of Citi’s banking business.

Citigroup fell to the sixth largest mortgage lender last year, after its mortgage originations dropped to 3.4 percent, according to Inside Mortgage Finance. Its market share was 8.1 percent at the end of 2007, when it had ranked fourth.

Citigroup will first look to expand its mortgage business through correspondent lending, in which they buy mortgages from other lenders. Citigroup intends to hold these new loans on its balance sheet but would be “extremely careful” about the quality of loans it will make, Fraser said.

“Citi is no longer reacting to the crisis,” Fraser said. She said that it’s important that Citigroup plays a bigger role in the mortgage business to earn more wealth and banking business.

Also, “it’s not just one of customers’ largest transactions, it’s one of their life events and we want to get good at that,” Fraser said.

Source: “Citigroup Aims to Ramp up U.S. Mortgage Lending,” Reuters (May 20, 2014) and “Citi Plans to Expand Mortgage Lending, Fraser Says,” Bloomberg (May 20, 2014)

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