Executives at the bank were quoted by Fox Business as saying that increasing mortgage interest rates have reduced scope for mortgage lending and refinancing activities and thus impacted division’s revenues.
Currently, a 30-year fixed-rate home loan charges more than 4.6%, compared to 3.5% before the summer, and this sudden surge in mortgage rates has reduced consumers’ demand.
Citigroup communications director Mark Rogers told Fox Business, "We recently announced the closing of the CitiMortgage Danville, Illinois, facility due to decreased refinance volumes, and discontinued some telesales positions.
"We have nothing further to announce at this time."
During the second quarter earnings, Citigroup chief executive Michael Corbat said, "In the U.S., although the housing market is gaining strength, the lower volume of mortgage refinancing will impact our consumer business."
It is believed that other global US mortgage lenders including Wells Fargo, Bank of America and JPMorgan Chase, will cut approximately 22,300 staff in their mortgage divisions in the coming months.
JPMorgan Chase is likely to axe approximately 19,000 employees over the next two years in states including California, Texas, New York, New Jersey, and Florida.
