High rates resulting in layoffs? Citigroup to cut 1,000 mortgage jobs

Citigroup Inc said it is eliminating about 1,000 jobs in its US home mortgage business, making it the latest bank to lay off staff as higher interest rates cut into demand for new loans and refinancing.

The bank is cutting about 8 percent of the 13,000 jobs in its mortgage division, with most of the cuts - about 760 - taking place in Las Vegas.

Banks including Wells Fargo & Co, JPMorgan Chase & Co and Bank of America have announced thousands of layoffs in their home lending units in recent weeks.

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

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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 per cent of the mortgage market compared to 22.5 per cent for Wells Fargo and 10.9 per cent for JPMorgan, according to Inside Mortgage Finance, an industry publication.

Roughly 800 of the jobs being eliminated are in sales, underwriting and fulfillment and reflect reduced demand for loans. Another 200 jobs are being cut because the company has less work to do on defaults because of higher house prices and fewer delinquencies, a person familiar with the matter said.

In addition to the jobs in Las Vegas, the bank is cutting about 100 in Irving, Texas, the person said.

Reuters