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TH E M R EP O RT | 51 O R I G I NAT I O N S E R V I C I N G A NA LY T I C S S E C O N DA R Y M A R K E T SERVICING THE LATEST LOCAL EDITION as Xome continues to focus on diversifying its revenue streams and client base. Xome's total rev- enues increased 43 percent year- over-year mostly due to higher sales price execution on property sales and growth in our title and close business. Nationstar expects Xome to continue to "transform the resi - dential real estate transaction ex- perience for consumers and real estate professionals. Key strate- gies for 2016 include improving core operations, continuing to grow third-party clients and making measured investments in new products and technolo- gies that will serve the needs of clients and target customers." "Looking forward, we remain focused on taking steps that improve customer experience and drive customer retention while delivering greater value for our shareholders. We enter 2016 well positioned from a strategic, operational and capital perspec - tive," Bray stated. Citi Homeowners Lose Mortgage Modification Appeal Suit AS CITI REPORTED ITS BEST NET INCOME IN NINE YEARS, IT ALSO WON A LEGAL BATTLE IN WHICH THOUSANDS OF HOMEOWNERS COMPLAINED THE COMPANY BROKE LOAN MODIFICATION TERMS. NEW YORK // New York-based Citigroup Inc., recently received a victory in an appeals court for a case involving homeowners al- legedly not receiving the agreed- upon terms for their mortgage modifications. In a memorandum from the U.S Court of Appeals for the Ninth Circuit, the judges declined to cer- tify the claims made by thousands of homeowners who argued that Citigroup broke their loan modifi- cation agreements. The plaintiffs alleged that Citi did not honor agreements to lower homeowners' monthly mortgage payments under U.S. Treasury's Home Affordable Modification Program. Homeowners said Citi broke promises to make their loan modifications permanent if they made reduced payments on time during a roughly three-month trial period, accusing Citi of breach of contract and breach of good faith and fair dealing. The court said the home - owners'' claims were too individualized since the agreed- upon deadline might have been affected by the "parties' course of conduct, changes in income, inaccurately or incompletely reported income, oral and writ- ten representations regarding documentation still needed and other modification options, ap- plicable Treasury Directives, and other considerations." "The district court's analy- sis focused on the relationship between the common and individual issues in the case. In doing so, the district court determined that individual issues predominated over common issues, because determination of the deadline by which Citi was allegedly required to grant or deny permanent modifica- tion could not be made "sim- ply by identifying the MED [Modification Effective Date] as stated in the TPP [Trial Payment Plan Agreement]," the memoran- dum stated. Citigroup did not immediately respond to a request for comment. In October 2013, U.S. District Judge Dale S. Fischer of Los Angeles Federal Court found the plaintiffs' claims suffered from "heterogeneity problems" that were just too individualized to settle together. "Plaintiffs have failed to pro- pose a method of measurement that can be applied classwide and ties breach of contract and other legal theories to liability and a reliable measure of dam- ages," Judge Fischer said. The district court ultimately determined that individual issues predominated over common is- sues, noting that "it is clear that an evaluation of the merits of the proposed class claim would require significant individualized inquiry," the memorandum said. Citigroup reported net earn- ings of $3.3 billion for the fourth quarter of 2015, nearly a ten-fold increase from the bank's reported net income of $344 million for the fourth quarter of 2014. The spike was driven by "higher revenues and lower operating expenses, partially offset by a higher cost of credit. Citigroup's effective tax rate was 29 percent in the cur- rent quarter, a decrease from 74 percent in the fourth quarter 2014, which was impacted by an el- evated level of non-tax-deductible legal and related expenses," ac- cording to the release. Citigroup's revenues increased year-over-year in Q 4 2015 by 4 percent up to $18.6 billion. For the full year of 2015, Citigroup's net income more than doubled despite a slight decline in revenues, from $7.3 billion on revenues of $77.2 billion in 2014 up to $17.1 billion on revenues of $76.4 billion in 2015. The $17.1 billion net income for the full year of 2015 was the Citigroup's best yearly net income in nine years. The price per diluted share shot up year- over-year from $0.06 to $1.02. The increase was driven by "lower operating expenses and lower net credit losses (that) were partially offset by the lower revenues and a lower net loan loss reserve release," according to Citigroup. "Overall, we had strong perfor - mance during 2015," said Michael Corbat, CEO of Citigroup. "The $17.1 billion we generated in net income was the highest since 2006, when our company was very different in terms of head- count, footprint, mix of business- es and assets. Over the last three years, we have made substantial progress toward our targets and execution priorities. We signifi- cantly improved our returns on both assets and tangible common equity, as well as our Citicorp efficiency ratio. We have sharp- ened our focus on target clients, shedding over 20 consumer and institutional businesses in the process." "Plaintiffs have failed to propose a method of measurement that can be applied classwide and ties breach of contract and other legal theories to liability and a reliable measure of damages." —U.S. District Judge Dale S. Fischer SERVICING