Nearly 500 CitiMortgage employees will be laid off as the company significantly reduces its home-equity loan originations.
The O'Fallon, Mo.-based unit is cutting 479 HEL positions, spokesman Mark Rodgers told MortgageDaily.com. The job cuts include 185 positions in Des Moines, Iowa.
The move was made in line with the company's announcement earlier this month that it would reduce residential mortgage assets by $45 billion as parent Citigroup grapples with liquidity.
"Because home equity products are not saleable in the current market, or likely to be in the foreseeable future, we are curtailing proactive marketing efforts that drive home equity loan volume," Rodgers said in a statement. "Citi is not exiting the home equity business, instead we will now focus our portfolio resources primarily on supporting existing Citibank, Corporate, and Smith Barney customers."
He noted the company will only portfolio 10 percent of its HEL production under an "originate-to-sell" model and sell the rest in the secondary market.