April 29, 2010 / 8:28 PM / 9 years ago

UPDATE 1-CitiMortgage to cut prices on US jumbo mortgages

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By Al Yoon

NEW YORK, April 29 (Reuters) - CitiMortgage will on Monday sharply reduce rates on jumbo loans to be a leader in a market where demand is waking up, Chief Executive Officer Sanjiv Das said on Thursday.

The U.S. lender will be “sharply chopping the prices” on 30-year fixed-rate and 5/1 adjustable-rate loans in order to be a “complete price leader,” Das told Reuters in an interview.

The push to grab market share in jumbo loans, or those above $417,000 in most areas, comes amid an increase in demand by consumers for the mortgages and by investors willing to buy them, Das said.

Loans originated by CitiMortgage created the backing for the first private residential mortgage-backed security in two years last week.

“We are beginning to see a lot of interest in the jumbo market,” Das said. “We want to demonstrate that Citi is a leader in jumbo mortgages and we believe that end of the market has been underserved,” he added.

CitiMortgage has not yet earmarked another set of loans for a residential mortgage bond but may do so within six months, he said. The bank currently has enough space on its balance sheet to hold loans it originates, he said.

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