Citicorp Mortgage Inc., once a giant in the residential mortgage industry, is shrinking its operations further.
The former No. 1 lender is closing its Stamford, Conn., processing operation. The move eliminates 100 jobs. All processing is being moved to Citicorp's St. Louis servicing center.
Citicorp Mortgage joins a growing list of lenders that have reined in operations since the loan refinancing boom ended last year.
But sources say Citicorp Mortgage is facing perhaps its most severe identity crisis since it was formed in the mid-1980s. People familiar with the bank subsidiary say it is deciding on its future.
"They are either going to become very, very aggressive or they are going to shut it down," said a lending executive close to the situation.
The executive said Citicorp Mortgage is facing such a tough decision because it is not now profitable.
Susan Weeks, a spokeswoman for the lender, said Citicorp does not release profit information for subsidiaries. She said the mortgage unit has not been showing a loss, unless earlier loan problems are counted.
Citicorp Mortgage has no intention of shutting its doors, she emphasized, and it will stay active in all its lines of business. She said the lender would evaluate its lines of business and decide whether to emphasize any of them.
"What we have been trying to say is, we are very focused on doing it right," she said.
"We will not try to be the biggest, but we will try to offer the best value for our customers and the best performance for our shareholders," she added.
The mortgage bank was king of the lending hill in the late 1980s. But a disastrous program to originate loans with limited documentation shrank the unit.
Today, Citicorp Mortgage is half the size it was. It now has 1,810 employees, 25% fewer than in 1992.
Its servicing portfolio was $40.4 billion at the end of last year. In the late 1980s, the portfolio had reached more than $60 billion.
Citicorp Mortgage was the 21st-largest originator in the nation last year, making $4.5 billion of loans. It had originated the same amount of loans the year before.
The company is still dealing with the fallout from its low-doc lending program. Last year, 6.7% of its home loans went delinquent. That was down from 7.3% in 1993 but still quite high.
A senior executive at a Northeast mortgage bank who is familiar with Citi's status said it wants "to become more aggressive from a business standpoint."
But the executive said Carl Levinson, Citicorp Mortgage's chairman, "is a good shake-up-the-place type of guy" - better at controlling costs than expanding originations.
Ms. Weeks said the unit has been "deconstructing and reconstructing" since 1991, when its problems came to light.
"People expected we would jump back with full force" after dealing with the loan problems, she said. "We don't want to do that."
