Lawmakers Approve Citi’s Loan Modification Plan

Posted on January 9, 2009. Filed under: bankruptcy, Foreclosure Defense, Loan Modification | Tags: , , , , , , , |

WASHINGTON–A trio of Democratic senators say they have reached a Loan Modification deal with Citigroup Inc. on a plan to let bankruptcy judges alter or modify home loans in an effort to prevent foreclosures.

The lawmakers aim to attach the Loan Modification plan to President-elect Barack Obama’s economic stimulus legislation.

The compromise between New York-based Citigroup and Sens. Richard Durbin, Charles Schumer and Christopher Dodd, would be limited to loan modifications on loans made before the bill is signed.

Until now, the lending industry has battled against the concept, arguing it would force lenders to hike mortgage rates.

Durbin says: “I hope other institutions will follow suit.”

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