Citigroup to Lower Mortgage Payments for Unemployed Homeowners
Mar 3rd, 2009 | By Rob | Category: housing
If you are unemployed and 60 days or more behind on your payments to CitiMortgage, help may soon be on the way, according to the Wall Street Journal.
Citigroup is expected to announce a program today to temporarily decrease mortgage payments on loans of $417,500 or less to ~$500 a month for homeowners during their unemployment. The program for those who have recently lost their job will also waive interest and penalties during the three month period of lower payments. Contact CitiMortgage for full details to see if you qualify.
The program is a great idea, though I wonder about the execution and some of the exclusions.
First, why must the recently unemployed go 60 days without paying their mortgage to qualify? If Citi recognizes the need to help those on unemployment who are having trouble making their mortgage payments, wouldn’t early intervention be more effective than a 60 day delay. Will CitiMortgage report delinquent borrowers to the credit bureaus even though they will soon qualify for the mortgage payment reduction?
Student loans allow for deferment and forbearance for income issues and unemployment to keep borrowers current on their loans when they are having difficulty. Why not mortgages?
Second, the exclusion of those who may need the program the most, those with mortgage loans of more than $417,500, seems counterproductive. Their loss of income and transition to living on unemployment will likely be the harshest. Does Citi expect them to sell their declining investment assets or is it simply saying that it doesn’t expect that the program will be able to help this population, so why bother?
Finally, why is their not a similar program for those who owe credit card debt to Citibank? Citibank is happy to allow you to purchase insurance against job loss on your debt; this should be included as part of the basic benefits of credit card ownership during these difficult economic times. Now, that would be a program for credit card rewards that I would like!
Of course, I am still encouraged by the fact that a mortgage lender is taking proactive steps to help homeowners and not relying on the Obama housing plan as the sole means to prevent foreclosure.
