If you hold a mortgage with Citigroup and are unemployed, the announcement made March 3 can help you with your payments. Citigroup has created a new program whereby it will temporarily lower mortgage payments for borrowers who have recently lost their jobs.
1. Recent job loss (you must provide proof of unemployment and sign a form indicating you are seeking new employment)
2. Borrower must be at least 60 days behind in payments
3. The home must be your primary residence (you must live there)
4. The program applies only to loans lower than or equal to $417,500
The payments will be lowered to an average of $500 a month for up to three months, and interest and penalties will be waived during this time. Citigroup currently holds over 1.4 million mortgages and services four million additional loans which will NOT qualify under this program.
Citgroup indicated that they believe this new plan will assist thousands of borrowers, and help prevent more foreclosures as the downturn in the economy leads to job losses. They are also hopeful that their program will prompt other lenders to follow in their footsteps. This big announcement follows Citigroup’s earlier news in November that it planned to modify loan terms by as much as $20 billion for borrowers who are at risk of falling behind on loan payments, but are currently not in default as of yet (how effective this program is remains to be seen). Both plans on Citigroup’s table were created from within the company, and the company denies the federal government had any role in it’s programs.
This appears to be a good faith effort on Citigroup’s behalf to assist troubled borrowers. It is a win-win situation to attempt to help borrowers in any way, as foreclosures effect not only the borrowers but have a great financial impact on the lender as well. With unemployment rates climbing monthly (the Labor Department figures show an increase to 7.6% in January, up from 7.2% in December 2008), this may be a lifeline to Citigroup mortgage holders to buy them some time for find alternate employment. Let’s hope other lenders follow their lead in the coming days.