Citizens Bank to close wholesale mortgage lending division

PROVIDENCE – Citizens Bank told its broker partners on Nov. 14 that it is closing its wholesale mortgage channel, according to a report by HousingWire. 

“After careful consideration, Citizens has made the difficult decision today to discontinue originations in the mortgage wholesale channel,” Chace Gundlach, senior vice president and national sales director, said in a letter to a broker partner that was obtained by HousingWire, an information services company based in Irving, Texas.

A Citizens employee told HousingWire the shutdown of the wholesale division was announced Nov. 14 and that employees of the division will be laid off when it officially closes in the beginning of 2024.

Citizens, which acquired Franklin American Mortgage in 2018, was among the few large depository banks operating in retail, wholesale and correspondent in the mortgage space, according to the report. 

In the first half of 2023, Citizens originated $2.4 billion in mortgages through the retail channel, a 60.3% decline year over year, according to Inside Mortgage Finance estimates, HousingWire reported. Correspondent channel volume came in at $2.5 billion, down 42.6% in the period. 

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Inside Mortgage Finance’s data also showed that wholesale production was smaller, at $1.1 billion from January to June, down 65.4% year over year, according to the report. It was enough to make Citizens the 10th-largest wholesale lender in the country.

In the letter obtained by HousingWire, Citizens said the contract has been terminated according to the terms of the agreement after the close of business on Nov. 15. Another letter sent to a different broker partner that was also reviewed by HousingWire mentioned the date of Dec. 6, according to the report. 

Citizens said it will continue to service all existing mortgages in accordance with its existing processes.

Other companies that have left the wholesale space over the last two years include loanDepot, Mountain West Financial, AmeriSave and Point Mortgage Corp. Home Point Capital, according to the report. 

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