HAGERSTOWN, Md. - Citigroup Inc. said Friday that it plans to close a Hagerstown unit that employs about 650 people servicing home loans that have gone into default.
The unit’s workers comprise about 28 percent of the approximately 2,300 Citigroup employees in Hagerstown.
Nearly 50 jobs will be cut by the end of March as the company sells the rights to service, mostly on behalf of Fannie Mae, the Federal National Mortgage Association, for about 64,000 defaulted mortgages, spokesman Mark Rodgers said. The loans had an unpaid principal balance of about $10.3 billion, Citigroup said.
Rodgers said Citigroup will end all mortgage default servicing operations in Hagerstown by the end of the year as part of a consolidation of that business. Citigroup wouldn’t say where any of those jobs might be moved.
“Decisions are never easy when we are dealing with job actions like this, but we have to respond to industry conditions and needs,” Rodgers said.
The Hagerstown job cuts were first reported by The Herald-Mail of Hagerstown.
Citigroup also plans to close a default mortgage service unitnear Fort Mill, S.C., in a move that could affect as many as half the 850 workers there, The Herald of Rock Hill, S.C., reported.
Rodgers said the Hagerstown positions to be cut by March are among 950 jobs the company is eliminating across the country, including in Las Vegas, Phoenix and St. Louis.
Rodgers said regulatory requirements have made it difficult for New York-based Citigroup to service the defaulted loans.
Citigroup has offset previous layoffs by shifting other divisions and functions to the Hagerstown office, Washington County Assistant Administrator Sarah Sprecher said.
“As they continue to be a major employer and player in the business community, we hope they may be able to add jobs from other units in the near future,” she said.
The Maryland Department of Business and Economic Development said it will work with the state’s labor office to assist the displaced workers.
“We are working both with the displaced workers, as well as with any companies that are hiring, to see if we can connect them and see if they have a need for an employee with a similar skill set,” spokesman Karen Glenn Hood said in an email.
Citigroup reported Thursday that it earned $2.6 billion in the fourth quarter of 2013. Its revenue dipped 2 percent to $17.9 billion.
Citigroup shares fell 33 cents to close Friday at $52.27.
Information for this article was contributed by Dakin Campbell of Bloomberg News.
Business, Pages 33 on 01/18/2014