Citigroup Monday became the latest major U.S. lender to try to help borrowers stay in
their homes, launching a program it said may result in $20 billion of mortgage refinancings.
AP
Foreclosed California home
The second-largest U.S. bank by assets expects in the next six months to reach out to 500,000 borrowers it said may need help to stay current on payments. It is focusing particularly on areas "likely to face extreme economic distress."
Citigroup also agreed to halt foreclosures for struggling borrowers who live in their homes, have sufficient income to afford lower payments, and are making an effort to work out their problems with the bank.
Monday's changes cover borrowers whose mortgages Citigroup owns, rather than those it has sold to investors. Citigroup said it also streamlined procedures to rework delinquent home loans, modeling it on a Federal Deposit Insurance Corp plan to ease terms for many IndyMac borrowers.
The bank said it has since 2007 already taken steps to help 370,000 borrowers avoid foreclosure. It said it ended September with $202 billion of North American residential real estate loans and a $646.5 billion mortgage servicing portfolio.
Citigroup joined Bank of America and JPMorgan Chase
among lenders to recently announce steps to limit foreclosures.
Lenders are acting as Washington faces pressure to do more to help borrowers, after ommitting hundreds of billions of dollars of taxpayer money to help support or bail out financial companies.
Foreclosures are soaring as home values and economic conditions decline, leaving many borrowers unable to keep up with payments or owing more than their homes are worth.
Home prices fell by a record 16.6 percent in August from a year earlier, according to the S&P/Case-Shiller Home Price Indices. Foreclosure filings between July and September rose 71 percent to a record 765,558, according to RealtyTrac.
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JPMorgan on Oct 31 said it would try within the next two years to renegotiate $70 billion of mortgages held by 400,000 borrowers. It also suspended foreclosures on loans it owns for about 90 days.
Bank of America earlier in October announced its own plan aimed at nearly 400,000 former Countrywide Financial customers, as part of a settlement with 11 state attorneys general. The bank bought Countrywide in July.
Wells Fargo , another major lender, has said it planned to refinance some troubled adjustable-rate mortgages it would take on when it finished buying Wachovia .