Citigroup Inc. has announced its plan to aid borrowers in stopping foreclosures and reworking mortgages — a big step for the second-largest US bank based on assets.
Because of the said announcement, the bank is now the major US lender concerned in helping borrowers. In the launching of the said program, Citigroup Inc said that the plan may result to having a $20 billion budget for mortgage refinancing. The bank expects to reach out 500,000 borrowers in the next 6 months.
The bank is more concerned with areas that have mortgages and foreclosure properties that, in their words, are likely to have economic distress in the near future. The bank has also agreed to temporarily stop processing foreclosure homes owned by its struggling borrowers who live in the said units.
But the bank maintained that such a privilege will only be given to borrowers who have enough income to support the lowest offered payments. Such borrowers must also make an effort to resolve their foreclosure-related problems with them.
Inspired by the Federal deposit Insurance Corporation’s plan to rework terms for IndyMac Inc. borrowers, Citigroup Inc. also announced plans of easing out terms and procedures for delinquent home loans. The said program also covers those delinquent mortgages that are expected to be under the list of foreclosure properties.
Although the bank had just made a formal press announcement, Citigroup Inc. reiterated that it has taken steps in helping borrowers since 2007. With this program, the bank has formally joined the pool of lenders that have recently announced similar programs. Bank of America Corp and JPMorgan Chase and Company have already made similar announcements earlier.
Analysts said that the bank measures were caused by the pressure that lenders are getting lately. Encouragements saying that banks should help their borrowers more are said to be fast on the rise.
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