Citi Is Planning to Sell $45B of Mortgage Assets.

New York -- Citigroup late last month disclosed plans to reduce its on-balance-sheet mortgage holdings by $45 billion over the next year or 20% of its total portfolio.

Officials in Citi's mortgage division told Mortgage Servicing News that the company will achieve the reduction through normal portfolio run-off but also will sell and securitize at least some of its holdings.

"We hope a majority of it will be through run-off," said one company executive.

CitiMortgage president Bill Beckmann said the banking giant hopes to increase its sales of loans to Fannie Mae and Freddie Mac. (A majority of its conventional production goes to Fannie.)

Citi also clarified that it will remain a retail, wholesale and correspondent lender but will no longer buy mortgages in bulk packages. "We will buy only on a flow basis," said one company executive.