Citigroup Offers Relief To Homeowners

Posted on November 11, 2008. Filed under: Loan Modification | Tags: , |

Citigroup is the latest big bank to try and help its most-reliable borrowers–this time by preventing the next round of foreclosures before they start.

On Tuesday, Citigroup (nyse: C – news – people ) said that it will reach out to 500,000 non-delinquent borrowers over the next six months to see if any of them are struggling to keep up with current payments. The program, which will focus on areas plagued by falling home prices and rising unemployment, will help to protect $20.0 billion in default-free mortgages that the bank fully owns. Citi will also formalize an existing moratorium on foreclosures on “good faith” borrowers who can afford their mortgages.

At the market’s open, New York-based Citi fell 0.6%, or 7 cents, to $11.12. Rivals JPMorgan Chase (nyse: JPM – news – people ) and Bank of America (nyse: BAC – news – people ), which have both recently announced similar efforts, gained 0.5% and lost 2.4%, respectively. (See “JPMorgan Offers Homeowners Little Help.”) Wells Fargo (nyse: WAC – news – people ), which recently acquired Pick-A-Pay lender Wachovia (nyse: WB – news – people ), has not announced a major initiative. These four firms service roughly half of the outstanding mortgages in the U.S. and also control about two-thirds of new mortgages.

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