Citigroup Creating New Mortgage Business

Bill Beckman has been appointed to create a new U.S. Residential Mortgage business that will include the origination, servicing and capital markets securitization processes. The announcement came Tuesday afternoon after the company’s stock shares dropped by 3.3 percent.

Citigroup believes that the new structure will allow the company to develop uniform products and practices for mortgage offerings. “Aligning our existing U.S. mortgage businesses in this way will improve their overall effectiveness and allow us to better serve our existing clients while providing greater value to our shareholders,” said Carl Levinson, head of the U.S. Consumer Lending Group.

Below is a copy of the full memo released to employees earlier today:

To: All U.S. Employees
Cc: Senior Managers
From: Jamie Forese and Carl Levinson
Date: January 8, 2008
Re: U.S. Residential Mortgage Business

We are pleased to announce that Bill Beckmann will assume a new role, responsible for the creation of an end-to-end U.S. residential mortgage business that includes origination, servicing and capital markets securitization execution. Bill will continue to report to Carl Levinson, head of the U.S. Consumer Lending Group and add a joint reporting relationship to Jamie Forese, Co-CEO of Markets & Banking (CMB).

Aligning our existing U.S. mortgage businesses in this way will improve their overall effectiveness and allow us to better serve our existing clients while providing greater value to our shareholders. Importantly, this new structure will permit us to develop:

• Uniform products, policies and practices for mortgage offerings;
• A single P&L for mortgage-related activities;
• Best practices with respect to pricing, risk management and return analytics;
• Consolidated and streamlined functions; and
• A more consistent face to our clients, regulators and other stakeholders.

In this role, Bill will work closely with Jeff Perlowitz, the CMB head of Global Securitized Markets (GSM), to determine how to best integrate Citi Residential Lending’s origination and servicing functions and those in CitiMortgage. Mortgage origination activities of CitiFinancial, Citibank and Smith Barney branches will remain with those business entities.

This new structure for our mortgage businesses will allow Bill and Jeff to design the best model to ensure highly effective and coordinated Capital Markets analytics, risk management and execution across non-agency products, areas that will now report jointly to Jeff and Bill. All other GSM businesses will continue to report solely to Jeff.

Bill will also work closely with Corporate Treasury with respect to dimensioning overall portfolio, capital objectives and required return hurdles.

Please join us in wishing Bill well in his new role.

Submitted by admin