Citigroup, (C) which agreed Monday to sell servicing rights on about 780,000 home loans, will use the resulting capital to expand in new mortgages, a business where CEO Michael Corbat sees potentially higher returns.
New Residential Mortgage (NRZ) will pay Citi about $982 million for rights to service the loans, which are backed by Fannie Mae (FNMA) and Freddie Mac (FMCC) and have outstanding balances totaling $97 billion. The New York-based banking giant said it’s exiting the servicing industry altogether by 2018, a move that comes amid a pullback by many of its peers.
