Citigroup Freezes U.S. Home Repossessions

November 12th, 2008

In other words, Citigroup doesn’t want to have to pay property taxes and HOA fees on any more properties that will just wind up being vandalized, looted or worse.

If you’re one of these upside buyers, be very careful when considering any offer that these bastards present to you. It may not feel like it, but you’ve actually got Citigroup over the barrel now.

Look at this:

Citi said it was imposing a moratorium on foreclosures for all clients willing to work “in good faith” to restructure mortgages, as long as they have sufficient income to make payments of some sort.

For Citigroup, whatever bum change you can come up with is better than the alternative. Whatever you do, think strategically.

Via: Guardian:

The US bank Citigroup is halting repossessions for most of its struggling mortgage borrowers in response to pressure for a softer approach in tackling the vast American sub-prime loans crisis.

Citi said it was imposing a moratorium on foreclosures for all clients willing to work “in good faith” to restructure mortgages, as long as they have sufficient income to make payments of some sort.

The initiative came amid fresh signs of the turmoil gripping the financial sector. Late on Monday, the credit card company American Express revealed it was turning itself into a bank, which makes it eligible for aid under the US government’s $700bn (£444bn) bail-out fund. American Express has struggled with a surge in bad debts on customers’ cards. The 158-year-old firm said offering high-street bank accounts would “build a larger deposit base to broaden our funding sources”.

Political momentum has been gathering for aid to homeowners to help “main street” alongside the US treasury’s rescue of Wall Street banks.

Citi, which is getting a $25bn equity investment from the US government, has written off more than $70bn of losses on mortgages and delinquent derivatives, making it one of the worst-hit surviving institutions. In addition to freezing foreclosures, the financial services group is launching a programme to pre-empt problems with some 500,000 loan customers who are not yet behind on payments but who may need help.

“We will pre-emptively reach out to help homeowners before they become delinquent, which is critical to avoiding the loss of a home and protecting their credit score and future borrowing potential,” said Sanjiv Das, chief executive of Citi’s mortgage arm.

The Mortgage Bankers’ Association recently revealed 4 million US borrowers are at least one payment behind on their loans, with 500,000 in the process of losing their property. America’s two government-sponsored mortgage aggregators, Fannie Mae and Freddie Mac, are close to announcing a far broader initiative to keep families in their properties, in an extension of a programme — Hope Now — to slow the rate of repossessions. It is backed by the Bush administration.

But experts say a halt on foreclosures is far from a panacea. Barry Zigas, director of housing policy at the Consumer Federation of America, said: “A moratorium on foreclosure will be effective at stopping foreclosure, it won’t be effective at stopping the underlying reasons of why people are in trouble.”

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