Tuesday 17th June, 2008 

A major debt consolidation company has announced that it is going to close its unsecured loans division and Future Mortgages division.

Citi Group recently announced that it would close two sub-prime lending businesses with resultant job loses of 670. The group stopped offering new loans in May as part of its plan to close their lending businesses. As a result, the main impact of the job losses will be felt most in Sunderland, where 400 people are employed. The North East of England has had its fair share of job loses in the financial sector where Northern Rock has recently announced job cuts of around 2,000.

Citi Group explained that they had taken a review of their business in the UK and had come to the conclusion that they saw more growth potential in their upmarket Egg and Citi businesses. In short they are bailing out of the secured loan market because they see no future in it due to stagnant house prices.

This is bad news for those who were relying on the equity in their house as a form of debt consolidation. Too many people have felt richer because they have equity in their house and consequently have released the equity via a secured loan to pay off their debts. Now this form of debt management is becoming harder as the credit crunch bites into house prices and as result the equity in properties.

Debtwatchdog urges those who have debt troubles to seek out help and advice as soon as possible. The tightening grip of the credit crunch will only make things more difficult for those who are classed as sub-prime or even those who are classed as prime. Citi Group will not be last company to change its lending strategy so doesn't be caught out, act now!