Citigroup reported its third quarter earnings today, and as expected, was hit hard by problems in the mortgage market — recording $3 billion in losses in its fixed income business. The bank said it absorbed a 44 percent decline in its securities and banking business, including $1.35 billion on loan commitments, $1.56 billion on mortgage-related losses, and $636 million due to credit deterioration. Click here to see the full earnings release. But the worst may not be behind Citi, as Forbes’ Market Scan comments:

In a morning conference call, Citigroup Chief Financial Officer, Gary Crittenden, predicted the consumer credit market would continue to deterioate amid increased delinquencies. That in turn, would hurt the company’s fourth quarter results. The warning seems to indicate that the firm is retreating from a slightly rosier earlier outlook. Earlier this month, Prince said Citi expected to “return to a normal earnings environment in the fourth quarter” after a down third quarter.

Of note here for anyone in the mortgage industry is the fact that Citigroup is also now seeing a hit to its U.S. consumer credit business. The company reported a 2 percent drop in U.S. card-based revenue due to lower securitization results and an increase in loan loss reserves due to a “weakening of leading credit indicators.”