November 11th, 2008 10:27 PM by Uletas Greene Carter
Today Citigroup announced it will expand its foreclosure prevention efforts and try to keep 130,000 troubled borrowers with $20 billion in mortgages in their homes.
Other banks are undoubtedly feeling pressured to be more aggressive in aiding homeowners, given how many billions of taxpayer dollars have poured into the industry to stem the credit crisis.
The company will determine where the need for mortgage modification is greatest, based on economic conditions, and send out letters to its borrowers in these areas to tell them that help is available should they need it.
For borroweres who have yet to deafult, Citi will now aim to reduce their monthly mortgage payment, including property taxes and insurance, to 40% or less of their income. To do that, it will freeze or reduce interest rates, extend the lifetime of the loan or even reduce the loan principal.
Even after taking these new bank programs into account, according to economists, an estimated 1.6 million Americans will lose their home this year either in foreclosure or distressed sale. Some 1.9 million are projected to lose their homes in 2009.
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