Citi Mortgage Originations Drop To Record Low

Tyler Durden's picture

One look at the level of Citigroup stock pre-open and one could get the impression that the bank had a whopper of a result. And, on the surface at least, it did, after it reported $1.30 in EPS, beating the $1.14 expected and revenues of $20.1 billion also beating the $19.4 billion expected if still a modest decline from the comparable result a year ago. What was not emphasized is that the bulk of the revenue, and thus earnings, upside was courtesy of the insolvent and bailed out Citi Holdings, where the top line increased by 58% from $914MM to $1.442Bn and the Net Loss shrink from $0.8 billion to $0.3 billion, while Citicorp - the main operating subsidiary - saw revenues decline by 5% from $19.7 billion to $18.7 billion, as Net Income dropped by 8% from $4.8 Billion to $4.4 billion.

In other words the entire beat was due to fudging the holdings and income statement in the rolloff, bailed out Holdings division (without which Citi wouldn't exist).

Why did Citi have to resort to such an algo-fooling cheap shoot? Simple: operations in its core banking group, the bread and butter of New Normal banks, Investment Banking and Fixed Income Markets, both declined by 10% and 18% respectively, as the US capital markets continue to deteriorate, leading to an 11% dump in the most important, Institutional Clients Group, EBT.


But what was worst, and naturally will not be discussed at all by the peanut gallery, about Citi's just announced results is that the amount of Citigroup mortgage originations - that key aspect of the trumpeted "housing market recovery" - did what it has done at every other bank. It plunged. Only at Citigroup, it plunged so badly, it just reached a new record low which at $5.2 billion is a 71% drop from a year ago! Long live the housing recovery... in which nobody seems to be participating.

And speaking of loan creation, based on reported data, so far in Q1, three of the four big banks: Citi, Wells and JPM have reported that total loan issuance is negative, something which drastically differs from what the Fed reports in its weekly commercial bank update report.

We eagerly look forward to the rest of the banks to conclude reporting Q1 numbers so we can determine just how wildly the Fed's H.8 statement is fabricating data.

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kliguy38's picture

World=RIgged ....there fixed it for ya

LawsofPhysics's picture

^^^You know this to be true as a relative few keep printing money out of thin air and handing it out to their friends.


Think about it, if the Fed really wanted inflation, give everyone access to money at 0.05 % motherfuckers, then you'll get that inflation...

Of course, allow people and corporates to go bankrupt too and force the owners to pay back the creditors with their own wealth..

SumTing Wong's picture

You've got it all wrong. The housing recovery is fine, but everyone is paying cash. Funny how I keep seeing more Chinese people flush with cash and then owning real estate...hmmm....

Doña K's picture

It's still a sellers market as the inventory in most places is not  there. Shacks for 350k

Just wait and you could buy the Chinese out at 60 cents on the dollar.



LawsofPhysics's picture

Please, the inventory is there, the banks simply won't bring it to the market.  Gotta keep those prices high...

insanelysane's picture

Maybe the soon to be unemployed HFT programmers will build a High Frequency Subprime Mortgage Origination system and get things back on track.

Doña K's picture

That was my point as well. when the banks are forced to release the inventory, you name your price. 

Four chan's picture

im 70% under water and have stopped making mtg payments.

Jay Bird's picture

It's just like saying the United States is ONLY 17 trillion in debt.  Slave on!!

TeamDepends's picture

A jobless, productionless, mortgageless, recovery is what we have here.

ArkansasAngie's picture

But ... we saved the financial institutions!!!!

I'd really like to see some disintermediation.

BlindMonkey's picture

The Ferrari factory is blowing out product.  Can't be all bad.   /s

GubbermintWorker's picture

YEah, its never been better for the super rich.

101 years and counting's picture

The Fed is participating.  They have been onboarding all the delinquent/foreclosed mortgages for 5+ years via MBS purchases.  And the suckers (taxpayers) get to absorb those massive losses.  

Bay of Pigs's picture

In many ways, nationalizing Fannie and Freddie were the end of the line for the US housing market. Another collapse is coming. It is certain.

buzzsaw99's picture

accounting shenanigans rule!

Ban KKiller's picture

GAAP is for suckers to fool the Muppets, no???

 Oh, non GAAP if you really need to cook the books with a "one off"report. 

And...fffffuck the Banksters!

TideFighter's picture

One wonders if there is some magical easy qualifying program that will allow all of the new 29.5 hour-a-week workers to qualify for mortgages without any documents. Oh, wait...

Iam_Silverman's picture

"One wonders if there is some magical easy qualifying program that will allow all of the new 29.5 hour-a-week workers to qualify for mortgages without any documents."

Well, the next best thing is still available - Section 8.

dizzyfingers's picture

Too bad so sad globalist-debtmongers, you screw the people, you get the final screw...closed wallets -- best demonstration of the common sense approach to debt. Every action brings an equal and opposite reaction.

chinoslims's picture

Citi made over $4 billion on EBT services.  Are you fucking kidding me?!?!?  


I'm not making this up the cup does exist.

Sorry, the sale ended.

Seasmoke's picture

Calm down. It's been relisted !!..... is that Vikram Pandits eBay account ??? I was wondering what he was up to. 

chinoslims's picture

I wonder if Krugman is gonna bid on this cup.

chinoslims's picture

I found another cup.  You've got 6 hrs to bid on it.  The opening bid is $9.99 plus $10.99 for shipping and handling or you can just buy the mug for $13.

What a bargin!  

Owning this is like owning a cup that says, "I just fucked the US Taxpayers, Bitchez!"

BlindMonkey's picture

Insulated from what exactly?  Reality?


Dr. Engali's picture

It's a good thing we bailed them out so they can continue to help our economy grow. Can you imagine how bad thing would be if we had just let them go under? Just ask Paul Krugman, he will tell you. 

Martial's picture

Krugman is busy helping plan a devestating false flag...the powers that be get their war, Krugman gets his keynesian wet dream.  A few nukes go off here and just look at all the cleanup and war-time manufacturing jobs it would create!

SumTing Wong's picture

But if everyone has a job cleaning up, how is Citi going to make any money on EBT services? 

Krugman gets screwed by his own broken window fallacy!!!

BlindMonkey's picture

Ahh.  But is the war going to be with Krugman's alien invasion or terrestrial in nature?  These things make a difference.

eclectic syncretist's picture

That stupid motherfucker's been looking so sad lately someone should head over to his place and bust out all the windows to cheer him up.

GubbermintWorker's picture

How many of these were re-fi's? Everybody who was gonna do that has done it. Now, treat us like the banks and give us a .005% interest rate and watch it boom again....for awhile.

LawsofPhysics's picture

The TBTF banks still control all aspects of this "market" folks.  They control supply (through foreclosure and resale), they control the cost of money (through interest rates), they control the number of "buyers" (by determining who gets a mortgage) and these same banks still get to use "mark to fantasy" accounting.

Guess we should have let them all die after all...

house prices would be in line with wages and we would be years into a recovery had we let these fuckers just die...

Ban KKiller's picture

Why I garden and raise some food? No lies.

Banksters make great mulch if mixed with straw.

GubbermintWorker's picture

That's more like fertilizer with all the bull shit mixed in it.

Iam_Silverman's picture

Well, like the morons who bought Tweeter stock thinking they bought Twitter (pre IPO too), I wonder if anyone had accidentally picked up shares in CIT group, thinking they were buying "The Big C" instead?  They would have done a little better, YoY.

NOZZLE's picture

Which explains the surge in car sales (whcih happens every spring by the way, its seasonal).

Which also explains why the local Chevy dealer is now parking his non-excess inventory on the adjoining lot that used to be used by K-Mart;s customers when there was still a K-Mart,

SumTing Wong's picture

The local Chevy dealer is parking them in the empty strip mall here. Channel stuffing, bitchez. 

813kml's picture

I wonder when car dealers are going to start offering 0% financing and no payments for two years.  That should pump sales numbers, and then the same car can be sold to the same deadbeat under the same terms after it's repossessed.

This game could go on forever.

intric8's picture

Its the fucking fed res. They tossed out so much free money so fast after the crisis that it pumped the housing market straight back into bubble territory, and right quick. If very few americans can come up with a downpayment on a house with rates at 3-4%, we must be broke azz. Hell, i'm living off instant noodles and cant afford movies anymore. How the hell am i ever supposed to buy property? Nice going Bernanke! You da man

Everybodys All American's picture

I don't think there will ever be a housing recovery like we've seen in the past. Single family is now going to be located in an apartment or condo building. Home builders are building multi family units all over the city in which I live and it reminds me of the last century's housing projects. Don't get me wrong they look nice now but I'll bet they will be occupied and run down by lowering incomes. Very much a forward socialist outcome.

Frostfan1's picture

I thought Citi sold off a ton of their mortgage servicing rights last year and laid off a bunch of people as they were downgrading their emphasis in this area.  Sure enough, that's exactly what happened when I searched for it in G----. Then this would be just another half-assed ZH distorting article with lazy and little research.

Frostfan1's picture

Was the word Citi anywhere in that article?  The subject is Citi for this thread, not mortgages.

thamnosma's picture

Mortgage originations are down across the board idiot.

Frostfan1's picture

They are down across the board.  The article is about Citi and the future impact on Citi.  If Citi was already lightening its mortgage load, then the message in the article is wrong.

Tortfeasor's picture

You know the difference between servicing and origination right ?


Frostfan1's picture

Sure but if they're dropping one, they're dropping the other.  If anything, the servicing shold just be a cash cow.

Frostfan1's picture

And a two second search shows they were cutting both back in September of last year.   As I said, lazy reporting.