CITI Mortgage A BUSTED FLUSH !!!!

Real Estate Trust shuts down with NO warning!!!

In an announcement sent out to approved brokers, CitiMortgage has shut the doors on Wholesale Home Equity Lines Of Credit (HELOC's).

"Earlier this month, CitiMortgage shared publicly a new business strategy that included originating greater percentage of saleable products. As a result of this strategy, we will no longer offer home equity stand alone or combo products, effective March 18, 2008." wrote Fred Bolstad, Executive Vice President, Wholesale Lending.

With fundings above $15 billion in 2006, down to the last 30 Account Executives let go without warning this morning, we wondered about the future of the entire Wholesale channel. Late last week we got this 'heads up' from an industry insider: All of our contacts in Prod Dev and Secondary are in the middle of some kind of fire drill; they sound freaked and stressed, and have no time to take calls. Indicated they were having some "systems" problems. I was looking for info on how the lenders handle the reprices/locks/pipeline etc, so I had to go to the field for the info: I called every Citi RET office in CA and got disconnecteds, the # was no longer for Citi, or just a voicemail. I then called another 40 branches from MD to IL and got the same thing.

We expected the above email... earlier in the day, we received a tip from a 'now former' AE:

CitiMortgage will not be doing HELOC's or Fixed Rate Seconds (except maybe piggy purchases - not sure of the details at this time) anymore. The official announcement will be out this afternoon after we get told if any of us survive (conference call) to move into other areas of Citi. Bottom line is: Citi is getting out of the Equity business - this includes Retail Channel too. Smith Barney will be the only one able to do some limited equity loans for their account holders and that's about it. End of an era... another casualty.

Unfortunately, a few minutes later the AE's learned in a conference call they will NOT be transferred, but simply let go. The internal notice from Bill Beckmann: "...we've made the decision to focus our more limited portfolio resources on supporting our existing Citibank, Smith Barney and Corporate customer base, and to discontinue proactive outbound efforts that drive non-saleable volume, including direct mail, Internet, electronic, utilization and related programs. Additionally, we are also announcing the elimination of both stand-alone seconds and combos from our Wholesale Lending offering."

Pip pip