Citigroup Inc.'s CitiMortgage, which last year decided to reduce wholesale production, is recontacting certain loan brokers it used in hopes of drumming up new business.
It is unclear how extensive the lender's broker outreach effort is. A spokesman said last week that CitiMortgage has no "formal" plans, but "we touch base with some former customers from time to time to consider the potential benefits of future relationships."
Brian Benjamin, the president of Two River Mortgage in Red Bank, N.J., said he was contacted by a CitiMortgage account executive in Texas and asked to reregister with the lender. "I was called out of the blue," he said. "I guess it had to do with my past performance."
Benjamin said he was filling out CitiMortgage's broker application, but his biggest concern as a broker was finding a steady source of financing for jumbo mortgages — those above the conforming limit of $729,750 — in and around the New York metropolitan area.
"A lot of lenders want 50% down on these loans," he said.
A broker in Colorado who sourced loans to CitiMortgage before it cut back its wholesale group said he is considering registering with the company but likely will not.
The broker, requesting his name not be used, said: "I have two good sources of wholesale funding right now — EverBank and Liberty Mortgage. They both treat me very well and they give me the answers I need."
He said CitiMortgage wants him to pay an application fee to reregister with the company, which he is loath to do. "It's a few hundred dollars."
Two years ago wholesale production from loan brokers accounted for about 30% of CitiMortgage's fundings. By the third quarter of last year that portion had fallen to just 11%.
CitiMortgage's correspondent production also has plunged, with the retail channel's share rising.
Benjamin said he was told that for every four telephone calls CitiMortgage made to former brokers, just one of the phone numbers still worked.
"That tells you something about what's happened to brokers," he said.
