The Wall Street Journal is reporting another substantial change at a major bank.
Citigroup (C) has just announced that under a downsizing plan the co. made known internally on Tuesday, Citi will reduce the number of outside mortgage brokers it does business with around the U.S. to 1,000 from about 9,500.
By substantially reducing the number of loans through independent mortgage brokers—what the industry calls the “wholesale” side of the business, Citi says is determined to realign the co.’s mortgage-loan business, and redefine in the process its new Wholesale business system.
The co. also said the basis of this new model is dependent on doing business with the right brokers via a low-cost, high-touch approach and will therefore leverage telesales and a smaller account executive footprint. Wholesale business will be fulfilled in St. Louis and Dallas, where the co. is adjusting support for this overall model appropriately.
Citi added that its retail model will focus on its most strategic relationships, including Citibank, Smith Barney, PFS, and Corporate Relocation. As a result, the co. plans to exit its less strategic originations sources in Self Source and Affinity. Retail volume will be fulfilled in St. Louis, Dallas and Southfield, where the co. will leverage current market opportunities.
Citi says it has identified approximately 1000 (versus the 9500 they have today) strategic business partners.
Citi also announced it will lay off about 500 sales and operations employees from its CitiMortgage division. Among the mortgage centers that are likely to close is one in Atlanta, which sells mortgages through Citigroup’s Primerica unit, a person familiar with the plans told the Journal.