Citigroup Inc, the fourth-biggest US bank by market value, plans to stem foreclosures as the firm modifies about $20 billion in mortgages, following similar moves by its largest rivals.
Citigroup will reach out to 500,000 homeowners in the next six months who may be at risk of falling behind on mortgage payments, the New York-based company said in a statement on Tuesday. The bank has helped about 370,000 people, or $35 billion in mortgages, avoid foreclosure since 2007.
Congress has been urging financial-services companies to work with borrowers after foreclosures rose to the highest on record in the third quarter. JPMorgan Chase & Co said October 31 it will stop foreclosure on some loans as it works to make payments easier on $110 billion of problem mortgages, while Bank of America Corp. said it has modified 226,000 loans this year, including those from Countrywide Financial Corp.
Citigroup is trying to help customers stay in their homes, Sanjiv Das, chief executive officer of the bank's mortgage unit, said in the statement. The company's stock rose 2 cents to $11.23 in German trading.
The bank said on an October 16 conference call that it was suffering a sixth consecutive quarter of deepening losses in the mortgage portfolio. The bank had restructured more than 120,000 loans, including granting extensions, during the first half of 2008, Chief Financial Officer Gary Crittenden said on the call.
Default Notices: A total of 765,558 US properties got a default notice, were warned of a pending auction or were foreclosed on during the third quarter, the most since records began in January 2005, data compiled by RealtyTrac Inc in Irvine, California, show.
Citigroup said on Monday it is “focusing particularly on borrowers in areas that are likely to face extreme economic distress.”