CitiMortgage Inc. Announces Strategic Exit of Mortgage Servicing Operations by End of 2018

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Citi Intensifies Focus on Mortgage Originations through U.S. Retail
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NEW YORK–(BUSINESS WIRE)–Citigroup announced it has executed agreements that will accelerate the
transformation of the U.S. mortgage business by effectively exiting
servicing operations by the end of 2018 to intensify focus on
originations. The strategic action is intended to simplify
CitiMortgage’s operations, reduce expenses, and improve returns on
capital.

Citi has signed a definitive agreement to sell its mortgage servicing
rights, and the related servicing, on approximately 780,000 Fannie Mae
and Freddie Mac loans of non-Citibank retail customers with outstanding
balances of approximately $97 billion to New Residential Mortgage LLC
(NRZ). The sale, subject to the approval of both agencies and the FHFA,
is expected to be completed in the first half of 2017.

In addition, Citi has entered into a subservicing agreement with Cenlar
FSB for the remaining Citi-owned loans and certain other mortgage
servicing rights not sold to NRZ. Loan servicing on these assets are
expected to be transferred to Cenlar beginning in 2018. As part of its
assumption of the servicing obligations, Cenlar will provide core
operations, customer service and default operations. Loans of Citi’s
retail banking clients will be retained by Citi but will be included in
the subservicing contract.

“Over the past several years, we have made significant progress
transforming our business to deliver a sustainable annuity of growth,”
said CD Davies, President and CEO of CitiMortgage. “CitiMortgage remains
a critical part of serving our customers, deepening relationships with
existing and prospective retail bank clients and driving growth in our
core markets. We will continue to originate loans for current and new
clients.”

Citi will work to ensure a smooth transition in the servicing of these
loans for affected clients and is working to transfer as many employees
as possible along with the mortgage servicing rights and operations.

These transactions are expected to negatively impact pre-tax results by
approximately $400 million, including a loss on sale and certain related
transaction costs, in the first quarter of 2017. Excluding these items,
these transactions are expected to have a minimal impact on operating
revenues in 2017, with expense benefits beginning to accrue in 2018 as
servicing is transferred to Cenlar and fully realized in 2019.

About Citi

Citi, the leading global bank, has approximately 200 million customer
accounts and does business in more than 160 countries and jurisdictions.
Citi provides consumers, corporations, governments and institutions with
a broad range of financial products and services, including consumer
banking and credit, corporate and investment banking, securities
brokerage, transaction services, and wealth management.

Additional information may be found at www.citigroup.com
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Certain statements in this release, including without limitation the
expected timing of the sale and transfers discussed above as well as the
anticipated impact to Citi’s results of operations, are “forward-looking
statements” within the meaning of the U.S. Private Securities Litigation
Reform Act of 1995. These statements are based on management’s current
expectations and are subject to uncertainty and changes in
circumstances. These statements are not guarantees of future results or
occurrences. Actual results may differ materially from those included in
these statements due to a variety of factors, including the
precautionary statements included in this release, the final financial
and accounting analysis of the transactions discussed, and the factors
contained in Citigroup’s filings with the U.S. Securities and Exchange
Commission, including without limitation the “Risk Factors” section of
Citigroup’s 2015 Annual Report on Form 10-K. Any forward-looking
statements made by or on behalf of Citigroup speak only as to the date
they are made, and Citigroup does not undertake to update
forward-looking statements to reflect the impact of circumstances or
events that arise after the date the forward-looking statements were
made.

Contacts

Citi Media:
Mark Rodgers, 212-559-1719
rodgersm@citi.com