In a message to mortgage partners this week, Bank headquartered in Providence, Rhode Island It said existing relationships will be terminated after December 6 and applications submitted by brokers will no longer be accepted. Loan applications received before the close of business that day will be processed according to normal protocols.
Citizen also emphasized that it will continue to provide services for existing mortgage loans originated through this channel, and its corresponding loan business will not be affected by this decision.
The bank cited current industry challenges as well as a broader shift in strategy as reasons for its exit.
“With evolving market conditions and economic pressures, and our strategic focus on relationship-based lending, we have decided to cease origination in our wholesale mortgage pipeline,” said Eric Schuppenhauer, Citizens executive vice president and head of consumer lending. In a statement to National Mortgage News.
He added: “Citizen continues to reposition its consumer franchise, focusing on areas that offer us the greatest opportunities to develop and deepen relationships with our customers, as reflected in our recent exit from indirect automotive origins.”
According to its most recently released financial report, Citizens’ third-quarter revenue totaled $2.3 billion.
Despite the pullback, Schubenhauer said mortgages would remain “an important part of our banking strategy given their importance in our customers’ lives” and that Citizens would offer products through retail and corresponding lending channels.
The bank’s move comes at the end of a difficult year for mortgage lenders, which has seen activity fall to its lowest level since the 1990s due to a prolonged rise in interest rates. Found current lending activity down 17% compared with the same period last year.
Following a wave of layoffs and consolidation, leaders of trade groups say further cuts are needed to right-size the business. Mortgage companies warned they should expect fights to continue 2024.
The challenge of making wholesale lending consistently profitable has led to several companies also exiting the wholesale space over the past two years, including Loandepot and Guaranteed Rate. Aggressive pricing strategy as key to dominating space Pricing competitors out of the market At super low rates.
Deposit bankbank of america immediately Cutting back wholesale business formerly part of Mitsubishi UFJ Financial Group alliance The merger is to be completed by the end of 2022.
But despite the cuts, some Wholesale experts also see growth opportunities in the pipelineincreased investment this year.