Yesterday, Citigroup announced that it was putting a moratorium on instigating new foreclosures as well as on completing foreclosures now in process. With this announcement, they join Morgan Stanley Chase, the Federal Deposit Insurance Corporation (FDIC,) and a Bank of America (which now holds Countrywide's loans) in attempting to stop foreclosures of single family homes.
The moratorium will be available to homeowners if they meet several criteria; they must want to stay in their home, be willing to work in good faith with the bank to resolve their problems, and have the income to afford payments on a restructured mortgage.
But Citigroup is not just waiting until borrowers go into default before helping them find new loan payment solutions. Over the next six months, the bank plans to contact about one-half million homeowners, about one-third of the bank's own borrowers, who are current on their mortgage payments now but are at risk of falling behind in the near future.
Banks are finally realizing that working with borrowers to prevent foreclosures, while expensive in the short term, is ultimately less costly than taking, managing, and marketing the foreclosed homes.
If you are having problems meeting your home loan obligations, call your bank. You may find that they are now willing to help you find a solution.
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