Unemployed homeowners get a break from Citigroup

Reduced mortgage payments for the unemployed? From the Associated Press at latimes.com:

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.

The struggling bank makes the move as President Barack Obama looks to lenders to adjust the way loans are handled.

Citigroup's new mortgage efforts also come on the heels of the latest attempt to bail out the company, which includes the U.S. government's exchange of up to $25 billion in emergency bailout money given to Citigroup for as much as a 36 percent equity stake in the company. The deal between the Treasury Department and Citigroup represents the third rescue attempt for the bank in the past five months.

Unemployed homeowners who may 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.

It will be interesting to see if other bailed-out lenders follow suit. If anyone gives this a try let me know how it works out.

-- Lauren Beale

Thoughts? Comments?

Photo: Citigroup headquarters in New York. Credit: Richard Drew / Associated Press

Comments

[Figgins]

Citibank is insolvent. Just take it off artificial life support. It is sucking away more and more of the money that could be used to put people to work building and fixing things everyone needs (roads, bridges, parks, etc.). I would rather spend money fixing the hiking trails in Yosemite, than put another cent into propping up Citibank.

This is Corporate Welfare at its worst. The delay shutting down Citibank is simply giving Citibank share holders more time to sell their shares, and Citibank Thieves (I mean managers) more time to rob US blind.

[MyLessThanPrimeBeef]

I think they should make a distinction between those who are unemployed and who voted for the winning political party last November, and those who are unemployed who voted for the losing party.

The latter are not only unemployed and stressed out, but mentally depressed as well. They especially deserve our sympathy and government help, for an enlightened, civilized government should not pander to only those who put them in power, but also take care of those who did not.

[Tim K.]

Uh, this is not going to help very many people at all. First, very few people will qualify, and of that very small sample, it's only "up to $500", and only for up to 3 months. $1500, one time, is not what separates people from foreclosing on their home.

The problem is their homes are worth maybe half of what they paid for them. This is a very weak attempt to make a "feel good" gesture but in reality the banks are just stalling. They want to delay having to mark their assets to market; i.e. say that houses really are worth only half of what they paid for them.

[LA-renter]

Exactly, Tim K.

Gestures of this sort do nothing in reality but fuel the "damn-the-loan-owners" bonfires... essentially a smokescreen.

Nice banker... naughty loan-owner.

[the problemwitcharing]

MyLessThanPrimeBeef:

They used to give lobotomies for depression....are you down for that? If so, forget the bailout - PWC will foot the tab...