Citi Scraps 1,000 Jobs Across its US Mortgage Unit

Citigroup has announced that its scrapping around 1,000 jobs in its US based mortgage unit.

The cuts come as higher interest rates have lowered demand for new loans and refinancing.

The losses amount to 8% of the employer's 13,000 strong mortgage division -- the majority (760) of which will take place in Las Vegas in December.

Around 800 of the jobs being eliminated are in sales, underwriting, and fulfilmentwhich reflect reduced demand for loans. The organisation will also cut 100 jobs in Irving, Texas.

Other lenders, including Wells Fargo, JPMorgan Chase, and Bank of America, have also announced thousands of lay-offs in their home lending units in recent weeks.

With mortgage rates rising to their highest level in two years, applications to refinance home loans plunged in early September to their lowest in nearly four years.

Citigroup Chief Executive Officer Michael Corbat warned investors on July 15, 2013 that the lower volume of mortgage refinancing would impact on the organisation's consumer business.

He said: "We're already taking steps to make sure the mortgage business is sized correctly."

Citigroup has a small residential mortgage lending business compared with its peers.

The third-largest US bank overall by assets was the sixth-largest mortgage lender in the first half of the year, capturing only 3.9% of the mortgage market compared to 22.5% for Wells Fargo and 10.9% for JPMorgan, according to Inside Mortgage Finance, an industry publication.

A spokesman for Citi said: "While difficult, these actions reflect our ongoing efforts to increase operational efficiency, adapt to changes in the marketplace, and position the business for the future.

"Citi will help impacted employees identify opportunities both inside and outside of the company. Impacted employees will be eligible for Citi severance benefits and transition support."