Portland Mortgage Broker

Citigroup reported today that its third quarter profit fell 57%, the biggest decline in over three years. Principally, Citigroup excused the significant loss by blaming it on the need to absorb losses in subprime loans. Revenue rose 6%, while net operating expenses rose 22%. Citigroup joins a long list of banks that have reported or projected losses recently from leveraged loans and subprime mortgages, including Bank of America, Deutsche Bank, Merrill Lynch, UBS Financial, and Washington Mutual. As of Friday’s close, Citigroup was down 14% for the year.

This week is going to be full of third quarter earnings releases, and it will be important to watch how mortgage bonds react. If the losses continue to mount, mortgage bonds may improve somewhat and stay above their 200-day moving average. the FNMA 6% bond is currently down 3bps.