Citigroup Sees Improvement in Residential Holdings

Citigroup executives say they are seeing better performance in the bank's $152 billion North America residential mortgage portfolio, thanks in part to asset sales and loan modifications. The serious delinquency rate (90 days or more past due) on its $96.4 billion portfolio of first liens fell to 10% in the first quarter, down 115 basis points from the previous quarter. It is the first quarterly drop in a long time. "Net credit losses on first mortgages declined 24% to $819 million in the first quarter driven by HAMP loan conversions and improvement in loan loss severity and $1 billion in assets sales during the quarter," Citi said during a conference call. In the first quarter, Citigroup converted more than $2 billion of delinquent mortgages into permanent modifications under the Home Affordable Modification Program. The bank said HAMP modifications are performing better than other loan restructurings and "early results indicate the re-default rates are likely to be lower." The bank did not break out the results of its CitiMortgage subsidy in reporting a first quarter profit of $4.4 billion. However, the company said it originated $31.5 billion of single-family loans in the first quarter down slightly from the previous quarter. As reported by National Mortgage News recently, CitiMortgage has shown some interest in growing its wholesale division again, contacting certain high performance brokers that once sourced loans to the firm.