Bloomberg News

Citigroup to Cut 1,000 in Mortgage Business as Refinancings Slow

September 23, 2013

Citigroup Inc. (C:US), the fifth-biggest U.S. mortgage originator last year, is cutting about 1,000 jobs in its home-lending business.

The job reductions will come in mortgage sales, underwriting, fulfillment and default roles, primarily in Las Vegas and Irving, Texas, the New York-based company said today in an e-mailed statement.

Citigroup, led by Chief Executive Officer Michael Corbat, 53, joins Wells Fargo & Co. (WFC:US) and Bank of America Corp. (BAC:US) in trimming home-lending staff as a surge in borrowing costs slowed refinancing by more than 70 percent since September 2012 and curbed what had been record profits. Citigroup announced the closing of a Danville, Illinois, facility in July, leading to 120 job cuts, and fired some telephone sales agents, the company said earlier this month.

“While difficult, these actions reflect our ongoing efforts to increase operational efficiency, adopt to changes in the marketplace and position the business for the future,” Mark Rodgers, a company spokesman, said in the statement.

The last day for most employees will be in November or December, and workers will be paid for two months afterward in addition to severance, a person familiar with the moves said.

Refinancings Decline

Separately, Citigroup is hiring employees to originate new mortgages for home purchases as opposed to refinancings, the person said.

The share of applicants seeking to refinance declined to 57 percent in the week ending Sept. 6, the lowest since April 2010, before rebounding to 60.9 percent the next week, according to the Mortgage Bankers Association.

Bank of America is eliminating 2,100 jobs and closing 16 offices by Oct. 31, two people with direct knowledge of the plan said earlier this month. Wells Fargo said in August it will cut 2,300 jobs in mortgage production.

Citigroup handed out $65 billion of mortgages last year, or about 3.4 percent of the total market, according to Inside Mortgage Finance, a trade publication.

To contact the reporter on this story: Dakin Campbell in New York at dcampbell27@bloomberg.net

To contact the editors responsible for this story: David Scheer at dscheer@bloomberg.net; Christine Harper at charper@bloomberg.net


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Companies Mentioned

  • C
    (Citigroup Inc)
    • $52.47 USD
    • 0.11
    • 0.21%
  • WFC
    (Wells Fargo & Co)
    • $52.26 USD
    • -0.06
    • -0.11%
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