Citigroup Inc., the third-biggest U.S. bank by assets, is cutting 950 jobs in default mortgage servicing after selling some business to Fannie Mae.
The dismissals include 200 in Fort Mill, S.C., and about 50 in Hagerstown, Md., said Mark Rodgers, a Citigroup spokesman. The New York-based bank is shuttering its default servicing operations in those two locations, Rodgers said today in a phone interview. He declined to provide the locations of where the other 700 cuts would occur.
The bank agreed to sell servicing rights for about 64,000 Fannie Mae residential first mortgage loans back to the government-backed firm, according to a Jan. 15 statement. The loans had an unpaid principal balance of about $10.3 billion, Citigroup said.
Mortgage servicers handle the billing and collections on home loan payments, and oversee foreclosures.
An additional 600 job cuts may occur by yearend in Hagerstown, with another 180 in Fort Mill, said a person familiar with the bank’s plans, who asked for anonymity because the numbers may change. About 400 of those in Hagerstown are work-at-home employees, the person said.
The employees will be able to apply for other jobs at the bank, and receive severance if they don’t find positions, Rodgers said. Citigroup remains committed to servicing both performing and defaulted home loans, Rodgers said.
“Decisions are never easy when we are dealing with job actions like this but we have to respond to industry conditions and needs,” he said.