Citigroup on Tuesday announced a comprehensive planto modify the terms of up to $20 billion in mortgages for people who borrowed from the company’s CitiMortgage subsidiary. The plan, separate from an additional plan announced by Fannie Mae and Freddie Mac to help troubled homeowners, aims to offer assistance to borrowers at risk of falling behind on their payments, whether they took out subprime or prime loans. CitiMortgage expects to reach up to half-a-million borrowers under the plan, which it has been testing for three months, according to the Wall Street Journal.
Homeowners who make loan payments to CitiMortgage can expect have those payments reduced by about 40% on average assuming they qualify (borrowers whose payments exceed 40% of their income qualify, although that percentage could change in the months to come, Citi said).
In an exclusive interview on Tuesday, Carmen spoke to Sanjiv Das, chief executive of the CitiMortgage unit, who told her that the main goal of the program is to be preventive. Citi is reaching out to borrowers before they fall behind on their payments, Das said, not after.
Das said he believes that Citi can work with homeowners who have stable incomes and good credit and who want to stay in their homes. Whether it’s extending the terms of their loan or systematically reducing the rate on the loan until they settle on amount in agreement with the borrower, Das stressed that the new homeowner help program offered through Citi has been thought through carefully and is designed with the borrower in mind. If you’re a struggling homeowner and you’re willing to work in good faith, “we will absolutely do everything we can to keep you in your home,” Das said. “That’s our mission.”
Homeowners with mortgages through CitiMortgage can expect to be contacted over the next six-12 months, Das said. In the meantime, anyone at risk of losing their home or income immediately should contact Citi. You can call 1-800-MORTGAGE to see if you’re eligible for their homeowner assistance program or log on to mortgagehelp.citi.com. If your mortgage is not with Citi, check hereto see if your bank offers a similar program that will help you stay in your home.