On Monday November 11th both the Federal Housing Finance Agency (FHFA) and Citigroup announced new loan modification programs. The FHFA program is similar to the FDIC’s IndyMac Mortgage modification program, and is the topic of a previous post.
Citi owns 1.5 million mortgages worth $175 billion and services five million loans worth $600 billion for investors. Their program will apply to Citi-owned loans on owner occupied property. The bank hopes to extend the programs to their serviced loans, if investor agreement is obtained. Over 4.5% Citigroup mortgages were more than 90 days past due at the end of the third quarter.
The CitiMortgage Loan Modification Program is similar to the FHFA and IndyMac Programs, but uses a 40% debt-to-income affordability criteria. Their program has a foreclosure moratorium feature and a mortgage prevention feature, which the IndyMac program does not have.
Foreclosure Prevention: The foreclosure prevention effort attempts to assist homeowners who may be struggling to make payments but have not yet defaulted on their mortgages. The company plans to contact over 500,000 non-delinquent borrowers in the next six months. Initial efforts will focus on six states which have higher unemployment rates and steeper price declines than most - Arizona, California, Florida, Indiana, Michigan and Ohio.
Foreclosure Moratorium: CitiMortgage had informally halted many foreclosures on Citi-owned mortgages for distressed borrowers who are working in good faith with Citi and have sufficient income to meet affordability guidelines. The program is formalizing this policy for mortgages on owner occupied homes.
The CitiMortgage Hardship Assistance page has more information and links to their application packet.
References:
CitiMortgage Hardship Assistance
CitiMortgage Loan Modification Program Press Release
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Tags: Citigroup Mortgage Modification, CitiMortgage loan modification, loan modification, mortgage modification, mortgages