CitiFinanical 'A Different Company' Now.(Citifinancial Mortgage)

Rating agency Moody's Investors Services says that Citifinancial Mortgage, the subprime lending subsidiary purchased by Citigroup two years ago, has become a "distinctly different company" as a result of sweeping changes made at the business.

And in a report on Citifinancial, Moody's said it views the changes as positive. Citifinancial traces a portion of its history to Associates, which was merged into Citigroup in December of 2000 as a result of the acquisition.

Since that time, and often under pressure from consumer advocates who had accused Associates of heavy-handed lending tactics, Citifinancial has revamped quality control and regulatory review, improved the credit quality of loans originated, and instituted back-office and operational upgrades, Moody's said. New front-end and servicing systems have been installed. Underwriting, servicing and quality control is centralized at the company's Irving, Texas, headquarters.

Many managers and professionals have been transferred to Citifinancial Mortgage from Citigroup, the rating agency said. And Moody's analyst Warren Kornfeld, chief author of a report on the firm, said Moody's analysts believe CitiMortgage, the parent company's prime mortgage lending unit, exerts a positive influence on underwriting, servicing, capital markets and operations at Citifinancial Mortgage.

Moody's said that Citifinancial Mortgage Co. is now "strongly positioned in the subprime mortgage market" as a result of the changes, including ...