Citi is in the process of shuttering sections of its mortgage servicing unit, with layoffs totaling around 950 employees. These layoffs are due predominantly to Fannie Mae loan sales being expedited to an independent company that specializes in high-risk, delinquent loans to service the mortgages that Citi was apparently responsible for. Loans are going to be transferred to Fannie Mae during the first quarter of 2014, numbering around 64,000 residential mortgage loans.
The speculation is that Citi’s firings are a kneejerk reaction to losing nine cents per share less than what was projected. Citi’s fourth quarter revenue was almost $18 billion. The actual revenue was around $17.8 billion, a one percent decline, year over year.
Citi announced that individuals laid off from the mortgage division are still able to apply for other positions within the company so it’s possible that the 900-plus workers can still work for Citibank. Back in September, Citibank announced that there were 2,200 employees on the chopping block.