FOLSOM, Calif. - CitiMortgage of St. Louis has sold Central Pacific Mortgage, a pioneer in the controversial practice of net branching, to John Courson, Central Pacific's president and chief executive officer, for an undisclosed sum.
CitiMortgage acquired Central Pacific when it purchased its parent company, Source One Mortgage Corp. of Detroit, in May 1999.
As a result of Central Pacific's sale, the Citigroup unit loses 100 net branches in 24 states.
Net branches are created when a large lender teams up with an independent broker or smaller company, which becomes part of the larger firm and originates loans in its name.
The practice has come under review recently by the Department of Housing and Urban Development, which is investigating several companies that it believes may have violated its rules.
