Citigroup Pursuing Customers for Mortgage Loan Modification

Citigroup looking for applicants

Homeowners looking for mortgage loan modification programs are encouraged by Citigroup to apply with them. Many homeowners are finding that their mortgage payments are unmanageable due to the recession. Many are falling behind, or at risk of doing so in coming months. Citigroup is one lender that is offering relief to their approximate 500,000 at-risk borrowers. Over the next 6 months, Citigroup is encouraging customers who may find themselves unable to pay their mortgage to contact customer service for answers.

Currently, the requirements are that borrowers must be current on their mortgage but believe that future months’ payments are in peril. Their goal is to reduce monthly payments to 40% of the borrower’s gross income, thus making their payments affordable and keeping them in their homes.

Interested borrowers

Borrowers who want to pursue Citigroup’s mortgage loan modification program will have to provide documentation to be considered for the program. Here are some documents to have on hand:

• Paystubs for at least the past two months
• W-2s from both 2007 and 2008
• Any additional income earned from part-time jobs or freelance work
• Total household expenses
• Insurance payments for house, car and life
• Property taxes
• If applicable, dues to associations for condo/townhome owners

The company then will review the information. All expenses will be added together and divided by the total income, to get the debt ratio. This ratio will dictate new payments as Citigroup will:

1. Reduce the interest rate for customers
2. Propose new loan terms
3. Reduce the loan balance

The lender is hoping that the changes will bring in a new group of customers who are able to make steady payments, thus making Citigroup’s revenues consistent.

Geographical concerns

Homeowners who are in high unemployment areas or where home values have taken sharp declines are a priority with Citigroup. Their mortgage loan modification is specifically targeting these customers, wanting to help them with manageable and affordable housing. In particular, the bank is looking to Arizona, Florida, Michigan, Indiana, Ohio and California as the target areas where recessionary effects have taken hold.

Another priority group is borrowers whose credit scores have seen a sharp fall over the past few years. Citigroup is taking this as a sign that these customers may be heading into bill payment problems in coming months. The company wants to step in and avoid any further issues before they occur.

Both groups are going to be asked to fill out a mortgage loan modification application and provide income and expense documents. The company is aggressively prioritizing these sectors to mitigate company risk.

The economy

The recessive economy has played a heavy role in the banking industry. Lenders who were once lending without caution, are now seeing how detrimental haphazard lending was. In an effort to turn things around, banks are taking proactive steps to reach out to customers in trouble, or reaching a troubled state. They want to help them stay in their homes by making payments affordable, as dictated by their debt ratios. Any customers who feel they need the help should contact Citigroup and fill out a mortgage loan modification application. Now is the perfect time to reach out for help that is available.