According to an article in the Star-Telegram, Citigroup Inc. will lower mortgage payments for unemployed homeowners facing foreclosures to an average of $500 a month for three months as part of their Homeowner Unemployment Assist program.
Customers who qualify include:
- Homeowners who are 60 days or more delinquent on paying their mortgage.
- Homeowners who are in foreclosure
- Homeowners who have proven they can pay the reduced mortgage.
- Homeowners who are applying to the program for their primary residence.
- Homeowners who have a first mortgage owed and serviced by CitiMortgage Inc.
- Homeowners who are meeting all insurance and guaranty requirements.
The article said:
"Our Homeowner Unemployment Assist program is intended to serve as a bridge toward a longer-term solution, helping homeowners stay in their homes and in their communities while they get their feet back on the ground," CitiMortgage Chief Executive Sanjiv Das said in a statement.
This program will benefit homeowners facing foreclosure tremendously. But it is not a long-term fix for the foreclosure crisis. Many of these homeowners facing foreclosure are suffering from reset ARMs and need their mortgages modified so that payments can become affordable. Nevertheless, hats off to Citigroup for taking the initiative to curb foreclosures at least in the short-term.
But of course we know that Citigroup's actions are not completely selfless, the temporary reprieve they are giving homeowners facing foreclosure is also a reprieve for the battered banker. Because the number of Citigroup foreclosures will be reduced temporarily, Citigroup will not be forced to process all of those foreclosures that they most likely won't be able to sell. The alternative is that Citigroup would've had a bunch of empty foreclosures on their books which equals no income, so taking this "reduced mortgage" action is a smart move for Citigroup.