Citigroup Launches Initiative to Protect Most Vulnerable Mortgage Holders

In the current world of financial turmoil, many people are worried about losing their homes due to mortgage arrears. Some people take out mortgage protection policies, but for those that cannot afford such cover, times are increasingly scary. One USA based bank is however trying to help those in need the most.

Citigroup Inc. is seemingly taking proactive actions to help the poorer members of the US, by allowing some recently unemployed mortgage payers to have a temporary reduction on their mortgage repayments.

Citibank is set to lower repayments for 3months to new av. repayment of five hundred dollars a month for some mortgage borrowers, providing they lost their jobs and are a minimum of 60 days delinquent.

The bank is quoted as saying that 1000’s of mortgage customers might be eligible for the scheme, which is hoped to make a difference to their lives.

The Citigroup deal is however limited to those that have mortgages that are owned by them, and leaves out the nearly four and a half million who have mortgages serviced by citigroup, but are not owned by them. Additionally, the mortgage holders must actually dwell in their house, and must in general have debts that are not bigger than $417,500.

Barack Obama, the new US president, stated that he has a rescue plan with the goal of lowering the repayments of around 9 million mortgage holders as an attempt to rescue an ailing housing market.

This is not the first time citigroup have been in the news this year, back in Jan ‘09, the citigroup stunned the banking industry when it actually endorsed some legislation intends to allow judges of bankruptcy courts to alter the terms of troubled mortgages.