Loans Expert

Red Roof Inns Inc., the hotel company acquired in a Citigroup Inc.-led buyout for $1.3 billion two years ago, defaulted on four loans totaling $361.4 million, credit rating company Realpoint LLC said.

The debt, which is 30 days delinquent, includes a $181.75 million loan and others valued at $76.6 million, $67.6 million and $34.4 million, Frank Innaurato, managing director of CMBS analytical services at Realpoint said. The collateral includes 113 Red Roof locations.

Hotel operators are struggling as the recession limits business and leisure travel. Occupancy is down 11 percent this year through May from a year earlier, according to Smith Travel Research. Mid-priced chain Extended Stay Hotels earlier this month filed for bankruptcy protection, citing decreased revenue and high debt.

Citigroup Inc. suspended purchases of loans from other banks and mortgage companies in the latest blow to smaller providers of home loans.

The New York banking company on Tuesday began a suspension of loan purchases through its so-called correspondent channel. The suspension is due to end July 6. Citigroup cited quality-control problems involving appraisals and verification of borrowers’ income, among other things.

Correspondent lenders produce loans for immediate sale to big banks. A Citigroup spokesman, Mark Rodgers, said the suspension will allow the bank “to make improvements to this important business that will ensure the continued delivery of superior quality loans.”