Citi Mortgage writes fixed rate conventional, VA, and FHA mortgages, with fixed rates terms available for 15 or 30 years. Citi also advertises a variety of variable rate mortgages. That start with a low, introductory fixed rate for the first 10, 7, 5, 3, or 1 year, and then reset to a variable rate tied to prime for the rest of the life of the loan. Citi Mortgage advertises their ARMs as, “Pay Less Now/Get More Now.”

Citi also claims to still offer interest-only mortgages, although playing around with the rate calculator at the Citi Mortgage website http://www.mortgage.com/ revealed that interest-only mortgages do not appear to be available at this particular time anywhere in the US. That’s not surprising given the current financial condition of the corporation, which is not good, to put it mildly.

Citi Mortgage is a part of Citigroup, one of the major issuers of subprime loans, and one of the most heavily damaged by the housing downturn and the subprime lending crisis. In November of 2007 Citigroup took a $7.5 billion loan from Abu Dhabi on poor terms just to stay afloat after suffering staggering losses. Shortly thereafter, Citigroup replaced its CEO.

In January of 2008, Vikram S. Pandit, the new Citigroup CEO, brought all of Citigroup’s mortgage activities under one entity that today retains the name Citi Mortgage. Before that, Citigroup also had a subprime lending arm called CitiFinancial, and on top of that, all of its mortgage lending and collection activities were split between its investment and consumer bank divisions.

By bringing all of Citigroup’s mortgage activity under the Citi Mortgage consumer division, Pandit aimed to reduce confusion and loss, and get better control over the corporations mortgage lending practices.

In March of 2008, Citibank then announced plans to pare its residential mortgage holdings by 20%, or roughly $45 billion, in an attempt to unload some of its riskier mortgage holdings and thereby reduce its subprime losses even further. It also cut another 2,000 employees from its payrolls.

More recently, Citi Mortgage’s parent Citigroup settled out of court on a $1.66 billion pay-out for its part it in the damages done to Enron shareholders during the Enron scandal.

It hasn’t been a very good year for Citigroup.

Citi Mortgage president Bill Beckman hopes reduce Citigroup’s mortgage holdings by selling 90% of the home loans made through his unit by the third quarter of 2008, and in the meantime by only making new home loans that are not meant to be sold.

In terms of individuals shopping for a mortgage loan right today, what this means is that no matter what Citi Mortgage has up on its public website, it might not be the easiest place to get approved for a new loan.

The real question however is, why would anybody want a mortgage with Citi right now? Despite the fact that Citi Mortgage still advertises creative mortgage products on its website, Beckman’s announcement means that they will be making very few, if any, new creative loans and will be dumping the ones it still has as soon as possible.

Some analysts believe that Citigroup has gotten too gigantic and complex, trying to be all things under one enormous roof, and can no longer manage itself properly.