At Least $25 Billion in MSR Sales Under Way: Hibernia.

Hibernia has completed the sale of its $10 billion third-party residential mortgage servicing portfolio to CitiMortgage, though it will continue to service some loans held in portfolio.

Paul Bonitatibus, president of consumer banking at Hibernia, told MSN the bank's decision to exit third-party mortgage servicing is part of a two-pronged realignment of Hibernia's mortgage business that began earlier this year.

Mr. Bonitatibus said that interest rate conditions were not a major factor affecting the timing of the sale. Regardless of the market condition for MSRs, he said issues relating to economies of scale, operational issues and strategic concerns were the primary drivers of the company's decision to exit the business.Those factors remain present "absent market conditions," he noted.

And he reiterated that Hibernia remains active as a loan originator within the bank's geographic footprint in Mississippi, Louisiana and Texas.

The company did not release financial details about the transaction, and a spokesperson said no financial details will be available until Hibernia releases its third-quarter financial results.

Earlier this year, the company exited correspondent lending and has stopped acquiring third-party servicing rights through acquisitions of correspondent loans, he said.

Transfer of the mortgage files is expected to occur in the first quarter of 2005, and Hibernia will continue to service those loans ...