Citigroup - FCS Warehouse - Warehouse Lending

Update - 2008-01-25:

"First Collateral dead per e-mail just received from Citi..."

We just received the above quote in an email with an attachment that appears to back up the statement. Click here (.pdf) to read the entire announcement emailed out at the close of business today.

Word on the street is there an attempt to find a buyer, but dinosaurs are hard to feed let alone find someone who wants to own one.

Original Implode Listing - 2007-12-03: On November 30, 2007 we were sent the following regarding First Collateral Services, Citigroup:

"Citigroup is doing some massive lay-offs today. Much of Sr. Mgment in First Collateral Division (Warehouse Lending) have been let go."

First CollateralServices Inc. of Concord CA is a wholly owned subsidiary of The Citigroup. FCS, the warehouse lending division of Citigroup, currently has about $1 billion in outstanding credit lines, and one source tells us "most of it is aged collateral" (as in non-performing). Warehouse lines from FCS were used for Conventional/Conforming Mortgages, Jumbo Loans, and Title 1 Loans (per their web site).

We received emails the following people are gone November 30, 2007: SVP-Credit; SVP-National Accounts; SVP-Operations; Head of Marketing.

We placed calls to all of these people on this list, with no answer or call backs. An expected 20 more people are slated to be gone by the end of the day. We called Brad Knapp, President, and at the time of this writing he's not available for comment.

One quote that came in says "They are going to stop renewing lines and liquidate the outstandings." An impromptu staff meeting was held to pump up the staff... reasons unknown.

We believe about 250 people will be affected by this closure. FCS has gone from $4 billion monthly in outstanding commitments, to well under $1 million according to sources.

For some Wholesale Lenders, Citigroup's FCS was their last open warehouse line. Now that these lines will not be renewed, expect more Implodes as funds dry up. As many as 100 Lenders may be involved.