An internal memo leaked to various press outlets on Tuesday afternoon finds that Citigroup, battered and bruised from the mortgage mess, will consolidate its mortgage operations under one roof. The streamlining effort will bring origination, servicing and capital markets operations together within one business line. The memo, which Reuters reports was confirmed by a Citigroup spokesperson, said that Bill Beckmann, president and COO of CitiMortgage Inc., will oversee the new business. No word on whether the reorganization would mean further job cuts at Citigroup, which in August 2007 acquired much of the mortgage business of now-defunct ACC Capital Holdings, former corporate parent of subprime giant Ameriquest and wholesale originator Argent, as well as a sizeable subprime servicing portfolio. From DealBook:

The announcement may also pave the way for Citigroup to run its mortgage operations more like its big credit card division — as a single, product focused group separate from its international and consumer banking units. And it could signal another step down the path of widely-discussed plans to put Citi’s consumer operations with its Smith Barney brokerage under a single leader. Such a “consumer distribution-orientedâ€? structure would mirror what Mr. Pandit did at the investment bank, when he combined it with its alternative investment unit to create the “Institutional Clients Group.â€? No final decisions have been made, and executives say all options are on the table.

The news of a mortgage shakeup at Citi comes as analysts have suggested the largest U.S. bank may be forced to write down $16 billion in the fourth quarter. The bank owns $55 billion in subprime and CDO holdings, Bloomberg reported.