Citigroup lower mortgage payments for some homeowners that are out of work

Citigroup lower mortgage payments for some homeowners that are out of work

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 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 B in emergency bailout money given to Citigroup for as much as a 36% equity stake in the company. The deal between the Treasury Dept. & Citigroup represents the third rescue attempt for the bank in the past 5 months. Unemployed homeowners who may qualify for assistance from Citigroup under the Homeowner Unemployment Assist program include those that's 60 days or more past due on their mortgages or in foreclosure & 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 CEO Sanjiv Das said in a statement. Citigroup predicts thousands of homeowners may be eligible for the program over the next 2 years. Those that partake in the program and are still without jobs after 3 months will have their mortgages handled on a case-by-case basis to come up with the best payment option, it said. Others find work within the 3-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. Homeowner Unemployment Assist is part of the bank's existing Citi Homeowner Assistance, which tries to help customers avoid foreclosure. One of the hardest hit banks by the ongoing credit crisis, Citigroup is in the process of shedding assets & cutting staff as it looks to reduce costs & streamline operations ahead of splitting its traditional banking businesses from its riskier operations. In Jan. the company reached a deal to sell a majority stake in its Smith Barney brokerage unit to Morgan Stanley. In premarket activity, Citigroup shares rose 11