Citigroup will cut about 950 mortgage jobs in 2014, according to the Charlotte Observer. The cuts come in the wake of the bank’s sale last week of the servicing rights for about 64,000 Fannie Mae residential loans.
Almost 20% of total mortgages serviced by Citigroup were included in the sale, which saw Citi offload the majority of its delinquent loan services. The loans had an outstanding principal balance of about $10.3bn, according to the Observer.
The cuts also come in the wake of disappointing fourth-quarter earnings for the lender. Although Citigroup posted a Q4 net income of $2.7bn, its per-share earnings were 9 cents lower than projected, the Observer reported. The bank attributed the disappointing earnings in part to last year’s precipitous drop in refinance activity.
Workers affected by the layoffs can apply for other job openings at Citigroup, a company spokesman said. Those who do leave are eligible for 60 days of pay and a severance package based on their years with the company. The lender also plans to offer job placement support to affected employees, the Observer reported.
A major U.S. bank is cutting nearly a thousand jobs in its mortgage unit after selling servicing rights for thousands of loans.