Donald Trump's campaign for president on Wednesday proposed raising the interest rates on some home loans to as much as 15 percent.The Trump Mortgage Bank, a subsidiary of his campaign, is the first big mortgage lender to go ahead with such a plan.The move comes after Trump, who has proposed closing the so-called revolving door between Wall Street and the White House, said in a recent interview th...
Citi mortgages have been around for years, but they were never really a household name.
But the company has been struggling with its finances and, with its mortgage program at an end, has been scrambling to come up with a way to make it right.
That’s what Citi’s chief executive officer, Gary Gensler, is trying to do.
The company said Thursday it has reached a deal with the Federal Housing Finance Agency to sell the mortgage-backed securities it holds in an effort to get it back on a solid footing.
The deal could help stabilize the company’s finances and its credit rating.
Citi was struggling in 2014 when it went under the financial pressure of a credit downgrade by Standard & Poor’s.
At the time, Citi said the company had $20 billion in cash and $1.3 billion in debt.
The bank has since taken a big hit, and Citi had trouble selling mortgages at an attractive price in the first half of the year.
But Citi is still looking for ways to recoup some of that money, and Gensling said in an interview that it will be part of a deal to sell a portion of its portfolio to help stabilize its finances.
“Our company has faced challenges before and we know how to get through them,” he said.
“But there’s a lot more we can do and a lot we’ve never done before.”
It’s a tricky situation.
The Citi mortgage portfolio includes more than $300 billion in mortgage-linked securities, including mortgage-title loans, credit card debt, and cash and property.
Citing “material uncertainty,” the agency downgraded Citi to a “negative” rating.
The move came after Citi took a huge hit last year from a downgrade by Moody’s Investors Service, and it led to the loss of $7 billion of revenue.
CITIC said in a news release Thursday that it would work with the agency to help the bank regain its financial footing and its high ratings.
Genslers statement did not provide any details about the deal or say how much it would be.
The government is now weighing whether to approve a proposal by the Federal Reserve for a $1 trillion bond-buying program, which would boost the bank’s stock market value by more than 1,000%.
“We are confident that the CITICA (Citi Mortgage-Ownership Corporation) will continue to be a leader in the mortgage industry and a leader of financial stability for decades to come,” Genslings statement said.
The Federal Reserve is expected to hold a meeting this week on the economy.
The bailout plan could also be a boon to mortgage lenders, which have been struggling in recent months with a sharp rise in interest rates and a slowing economy.
At one point, interest rates were as high as 5.3% and a mortgage-interest rate hike was on the cards.
But with the Citica sale, the company will be able to tap into more of the $5 trillion in capital it holds and boost its return on capital, the amount it can borrow from investors for debt.
Citigroup and other mortgage lenders have been in a state of limbo for months.
That has made it hard for them to sell mortgage-based securities.
The stock market has been on a tear since the Cibiz IPO last year, and the stock has soared more than 2,500%.
Citi, which has struggled financially over the years, has seen a surge in interest rate hikes.
At some point in time, the Fed would need to approve the sale of the Citalit’s mortgage-related securities.
It is not clear when that might happen.
It’s also unclear how much the deal will help Citi and its struggling lenders, since the company did not release any information on its finances at the time of the deal.
The lender is looking to sell its assets to help pay down its debt, but Gensley said it’s not clear how much of that will go to the company.
“This isn’t something that we’re trying to sell our company for,” he told Recode in an email.
What we’re looking to do is buy back this asset and get it into the best financial shape it can be for the people who are responsible for it.”