Central Pacific Mortgage, the “net branching” operation that CitiMortgage agreed last week to sell, was in full compliance with Department of Housing and Urban Development rules, according to the executive who is buying it.

Nevertheless, industry sources say that large lenders are busy distancing themselves from the practice of using net branches — in which they form partnerships with independent brokers or smaller companies, usually during down cycles in the mortgage business, to boost origination volume.

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