Citigroup Inc. has become the latest major bank to unveil plans to help distressed homeowners avoid foreclosure.
The New York financial services giant today announced the launch of its Citi Homeowner Assistance program, which will modify about $20 billion in mortgages over the next six months in order to make monthly mortgage payments more affordable for vulnerable homeowners.
The program will target a select group of 500,000 homeowners whose mortgages are held by Citi and who may require help to remain current on their mortgages.
The program will focus particularly on “at-risk” customers in areas hit by falling home prices and high unemployment rates.
Under the initiative, monthly mortgage payments will be lowered for these borrowers, either by cutting the interest rate, extending the term of the mortgage or forgiving part of the principal.
“Citi continues to build on its long-standing efforts to develop new ways to help our customers remain in their homes,” Sanjiv Das, chief executive of CitiMortgage, the bank’s mortgage unit, said in a statement.
The program will “pre-emptively reach out to help homeowners before they become delinquent, which is critical to avoiding the loss of a home and protecting their credit score and future borrowing potential,” the statement said.
Citi also plans to seek shareholder approval to include mortgages that it currently services but does not own.
Several of Citi’s peers, including Bank of America Corp. of Charlotte, N.C., and JPMorgan Chase & Co. of New York, announced similar programs last month.
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