Citi cuts unemployed homeowners slack

CitiMortgage announced today it will reduce the monthly payments of homeowners who lose their jobs and are behind on their mortgages to an average of $500 a month for three months.

The new Homeowner Unemployment Assist initiative is available only for first mortgage loans on a principal residence that conformed to Fannie Mae and Freddie Mac's limits at the time of origination.

Borrowers must be 60 days or more behind on their payments or in foreclosure, and cannot participate if they are eligible for a long-term loan-modification using criteria developed by the FDIC and adopted by Citi.

Nevertheless, the company said it expects "thousands of homeowners may be eligible" to participate in the program in the next two years.

Citi said if participating borrowers aren't employed again within three months, it will work with them on a "case-by-case basis" to "explore the best solutions for the customer." The program may be expanded to include borrowers at earlier stages of delinquency or those who are current on their loans depending on initial results.

The initiative falls under the umbrella of the Citi Homeowner Assistance program, which the company says has helped 440,000 distressed homeowners with mortgage debt totaling $43 billion avoid foreclosure since 2007. Last year, Citi said it was able to avoid foreclosing on four out of five distressed borrowers whose loans it services.

Citigroup Inc. CEO Vikram Pandit last month announced a foreclosure moratorium that is scheduled to end no later than March 12, or before then if the Obama administration finalizes details of a new loan modification program announced Feb. 18 (see story).

All rights reserved. This content may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of Inman News. Use of this content without permission is a violation of federal copyright law.