Citi Plans to Modify $20 billion in Mortgage Loan Relief Effort

by admin ~ November 11th, 2008.

A new loan modification program aimed at homeowners who haven’t defaulted yet could help 130,000 mortgage borrowers stay in their homes. Citigroup says it will expand its foreclosure prevention efforts by extending loan work-outs to 130,000 distressed homeowners with $20 billion in mortgage loans in their houses. Banks are unquestionably being pressured to be more pro-active in foreclosure prevention measures with mortgage relief to homeowners, since billions of taxpayer dollars have poured into the industry to ease the foreclosure crisis.

Citi calls their home preservation effort, the “Citi Homeownership Assistance Program” and they are targeting 500,000 Citi customers. Citi Mortgages CEO Sanjiv Das said he expects that more than 25% of these homeowners, with mortgage loans worth about $20 billion, will take advantage of the program over the next six months.  “We’re reaching out to homeowners in areas of steeper-than-usual falling prices and higher-than-average unemployment,” said Das, including California, Michigan, Florida, Nevada, Ohio, Hawaii and Arizona. “These areas are where the concentration of high risk mortgage loans is the greatest.”  According to former Ditech mortgage executive, Jeff Morris, “Home loan modifications are helping out the homeowners living on Main St. so it’s the least the big banks on Wall St. can do if they want any liquidity at all.”



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