Friday, November 14, 2008

Citigroup works with homeowners to avoid foreclosure

Citigroup has joined Morgan Stanley Chase, the Federal Deposit Insurance Corporation (FDIC,) and a few other large banks in initiating an aggressive program to mitigate foreclosures of single family homes.

The bank said on Monday that it is putting a moratorium on both initiating new foreclosures and on completing the legal process against homeowners who are currently moving toward foreclosure. The moratorium will be available to homeowners if they meet several criteria; they must want to stay in their home, be willing to work in good faith with the bank to resolve their problems, and have the income to afford payments on a restructured mortgage.

Citigroup will attempt to restructure mortgage loans by reducing the principal of the loan, extending the amortization period, and/or adjusting interest rates.
The bank has suffered greatly from the subprime crisis, losing a staggering amount of money in each of the last four quarters, much more than any of its principal rivals.

Like FDIC, Wells Fargo, Morgan Stanley Chase and even Wachovia which is soon to be absorbed by Wells Fargo have finally realized that working with borrowers to prevent foreclosures, while expensive in the short term, is ultimately less costly than taking, managing, and marketing the foreclosed homes.

The geographic focus of Citi's efforts will be, at least at first, on those areas where unemployment and foreclosure rates are high.

This will include Florida, Arizona, California, Michigan, Indiana, and Ohio.

For moe: Mortgage Daily News

If you or someone you know is trying to avoid foreclosure or needs to sell a home where they owe more than the homes present value, contact us, we have programs that may help.

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