Citi today unveiled the so-called “Homeowner Unemployment Assist” program, an initiative aimed at helping the recently unemployed stay in their homes.
Specifically, the program will assist delinquent CitiMortgage customers by reducing monthly mortgage payments for three months so they have ample time to look for a new job.
For most qualifying homeowners, this will equate to average monthly mortgage payments of just $500, which Citi notes is below the cost of the nationwide average rent for a one-bedroom residence.
“Unemployment is a major concern facing the American economy right now, and it especially worries mortgage holders,” said Sanjiv Das, CEO of CitiMortgage, in a release. “Our Homeowner Unemployment Assist program is intended to serve as a bridge toward a longer-term solution, helping homeowners stay in their homes and in their communities while they get their feet back on the ground.
“The Homeowner Unemployment Assist program is just one of a variety of innovative ways in which Citi is helping distressed borrowers, and also presents anticipated bottom line savings for Citi in the form of reduced credit losses, which is a win-win situation for our shareholders and our mortgage holders.”
To be eligible for assistance, the borrower must have a first mortgage loan owned and serviced by CitiMortgage that was conforming at the time of loan origination and used to finance a principal residence.
Additionally, the borrower must be 60 days or more delinquent on their mortgage or in foreclosure, have sufficient funds to make the reduced payment, meet all insurer or guaranty requirements, and not be eligible for or participate in the FDIC’s loan modification program recently adopted by Citi.
However, those who receive assistance through this program and find new employment may also receive a loan modification after the fact if eligible.
Citi noted that it would consider expanding the program to include borrowers in earlier stages of delinquency or those who are current on their loans, as appropriate.
It expects thousands of borrowers to qualify for assistance over the next two years, assuming they choose to participate.