Citigroup to lower some mortgage payments (to $500/month for jobless)

Associated Press ^ | March 3, 2009 | Michelle Chapman

[reaganaut1]

NEW YORK (AP) -- Citigroup Inc. said Tuesday that it will lower mortgage payments for some homeowners to an average of $500 a month for three months as part of a new program to help the unemployed.

...

qualify for assistance from Citigroup under the Homeowner Unemployment Assist program include those that are 60 days or more past due on their mortgages or in foreclosure and can pay the reduced amount. Customers must also have a first mortgage loan that is owned and serviced by CitiMortgage Inc. and conforms to government sponsored enterprise limits. The house must also be the customer's primary residence, with homeowners meeting all insurer and guaranty requirements.

"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.

Citigroup predicts thousands of homeowners may be eligible for the program over the next two years.

Those that partake in the program and are still without jobs after three months will have their mortgages handled on a case-by-case basis to come up with the best payment option, Citigroup said. Others that find work within the three-month period can go back to paying their original mortgage amount or receive a long-term loan modification if qualified.

The program may also be expanded to include customers that are in early delinquency stages or are current on their mortgage at a later point in time once an initial evaluation of the program is complete.

[reaganaut1]

Reading about the program at the Citigroup site, the payments above $500 are being deferred, not forgiven entirely. If a bank thinks forbearance is in its interest, it should be allowed to do so, but Citigroup is effectively controlled by the government because it has taken so much TARP money, so this may be a quid pro quo. I fear that the Obama administration will try to keep insolvent institutions alive so that they make "loans" (and later forgive them) to politically favored groups. The less money Citigroup collects on its loans, the less it will be able to repay taxpayer loans.

[mikelets456]

And the spiral continues downward...

[ETL]

I heard they also plan on modifying their name to “Sh*tty-Bank”.

[mikelets456]

“.....I heard they also plan on modifying their name to “Sh*tty-Bank”......”

I guess that is why their stock ain’t worth CRAP!

[ConorMacNessa]

Does the phrase “negative amortization” strike a familiar note?

[Smogger]

Like many Americans I pay my Mortgage to Citimortgage. In fact a $1700 payment went out today that included my impounds and, foolishly, an additional $200 in pricipal.

What’s in it for me?

I would love to see my 5.75 fixed drop to say 4-4.5%

[ItisaReligionofPeace]

I use Citi. I am very tempted to call them and demand that they give me a chance at these $500 payments.

[Atlas Sneezed]

foolishly, an additional $200 in principal.

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In a few years when we have official double digit inflation, you’re going to kick yourself for paying off more than you needed to. Put the extra money under your mattress, or in short-term T-bills. When inflation kicks in, put it in an inflation hedge.

[RegulatorCountry]

That’s funny, I’d heard they were now CitiCorpse.

[PzLdr]

Why doesn’t Citi just give them the house? They won’t be able to pay for it later, either. And it will make Il Douche SO-O-O happy!

[freekitty]

If this bank is on the brink of disaster why are they still doing business? Shouldn’t they be put out of their misery?

Oh, I forgot Obamba and Company have owned them long before the crash hit.

[ETL]

I should have wrote it: “Sh*ti-Bank”