ABN Amro Acquisition Moves Citi up Rankings
Citigroup has agreed to purchase ABN Amro Mortgage Group here for an undisclosed sum, a purchase that will make it the nation's fourth largest residential servicer with $728 billion in receivables. The sale effectively removes AAMG - once the nation's largest wholesale funder - as a major player in mortgages.
The sale also will put CitiMortgage in a virtual tie with Wells Fargo Home Mortgage for the No. 3 spot among residential wholesalers, according to figures compiled by this newspaper and the Quarterly Data Report.
AAMG's parent, LaSalle Bank Corp., will continue to originate home mortgages but only through its bank branches in Illinois, Indiana and Michigan.
In November, National Mortgage News, MSN's sister publication, was the first to report that ABN Amro was for sale.
Citigroup's residential arm, CitiMortgage of O'Fallon, Mo., currently ranks sixth among funders and fifth among servicers with a $504 billion portfolio, according to the Quarterly Data Report. (See table.) CitiMortgage will incorporate into its current operation, AAMG's wholesale/broker platform, InterFirst, and Mortgage.com.
Bill Beckmann, president and CEO of CitiMortgage, said industrywide consolidation is leading to a "a smaller number of broad-based players" that "will need balance in its channels." Mr. Beckmann would not comment on possible layoffs because of the merger but said, "Our goal is to grow" the business. He also said the purchase of AAMG "strengthens our distribution channels."
Tom Goldstein, CEO of AAMG, will not be joining CitiMortgage. Mr. Goldstein said LaSalle has asked him to stay on, but he is not entirely sure of his plans.
The sale is expected to close by the end of the first quarter.
Snapshot: Citi's Growing MSR Portfolio
Company Name Serv. Rights Share
ABN Amro Mortgage $224.3 Billion 2.56%
CitiMortgage $504.2 Billion 5.75%
Combined $728.5 Billion 8.31%
Source: MSN/Quterly Data Report. (c) 2007 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com http://www.sourcemedia.com