Citigroup offloads $750 million in delinquent loans

Citigroup ($36.97 0.31%) offloaded $750 million in delinquent loans in the third quarter alone, as part of a larger effort to reduce exposures associated with its mortgage portfolio and further efforts to bring similar operations inhouse.

In an earnings call with investors this morning, the bank noted expenses in the third quarter are rising, mainly due to operating retail centers for the origination of mortgages and other loans.

Retail revenue also grew 35% to $1.7 billion compared to last year, and reflects higher mortgage revenue.

One of Citigroup net credit losses in the third quarter of 2012 included $635 million of incremental mortgage charge-offs, which were required by new Office of the Comptroller of the Currency guidance regarding the treatment of mortgage loans where the borrower has gone through bankruptcy.

In similar third quarter revelations, the OCC also forced JPMorgan Chase ($42.38 0%) and Wells Fargo ($33.90 0%) to write down HELOCs.

The majority of the charge-offs were related to loans that were current.

The $635 million of charge-offs was offset by a related reserve release of $600 million, therefore did not have a big impact on the reported net earnings.

Mortgage revenue grew by 6% in North America to $5.4 billion, which was offset by international revenue that declined 2% to $4.8 billion.


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