New Program Could Help Half a Million Homeowners

Nov. 11, 2008— -- CitiMortgage, the nation's fourth-largest mortgage lender, announced today a new assistance program aimed at homeowners potentially at risk of falling behind on their payments or losing their homes to foreclosure.

Citi's homeowner assistance program will reach out to 500,000 customers still current with their monthly payments but who live in areas where home prices are falling or unemployment rates are rising. This represents nearly a third of the mortgages that Citi owns.

"Borrowers need to know what options are available to them before they are in a situation of financial distress," said Sanjiv Das, CEO of CitiMortgage. "They should know Citi will modify their loan even before they miss their payments."

Citi expects the program will almost immediately impact nearly 130,000 customers, totaling $20 billion in loans, by assisting borrowers regardless of the type of loan they currently own.

"Ours is not product specific, ours is borrower specific," said Das.

The new initiative from Citi comes as federal and state governments, homeownership preservation groups and other banks -– most recently JP Morgan Chase –- have launched programs over the past year to help homeowners -- at risk of foreclosure -- stay in their homes in order to shore up the nation's crumbling real estate market.

But Guy Cecala, publisher of the trade publication "Inside Mortgage Finance," cautioned that initiatives like this from CitiMortgage, as well as programs from other banks, look great on paper but often are not that dramatically different from what the banks have already been doing.

"Generally, the numbers they throw out there in terms of expectations are not that different from what they said they would do six months or even a year ago," he said. Cecala pointed out that the announcement from Citi comes a day before congressional hearings that could be critical of the action or inaction by lenders and mortgage services to help struggling homeowners.

"All these initiatives are as much in response to political pressure as they are to lenders responding to rising foreclosures."