Citi Inks Deal to Buy Principal

Citigroup, one of the most active buyers in the mortgage space over the past few years, has agreed to pay $1.26 billion for Principal Residential Mortgage, Des Moines, Iowa, the nation's 11th-largest residential servicer.The acquisition, which is expected to close by year-end, will make CitiMortgage, O'Fallon, Mo., the nation's fifth-largest residential funder and servicer. CitiMortgage currently ranks seventh in servicing, and eighth in production, according to figures compiled by National Mortgage News and the Quarterly Data Report. Once completed, the sale will leave Cendant Mortgage, Mt. Laurel, N.J., and GMAC Mortgage, Horsham, Pa., the lone nondepositories among the top 15. Cendant was almost sold to Countrywide Home Loans about a month ago, but the sale fell apart late in the negotiation process. In its May 10 issue, NMN broke the news that Citi was talking to Principal Financial Group, the insurance parent of PRM, about a deal.