Citigroup boosts help for mortgagees
By Al Yoon |
August 26, 2009, Wednesday
|
Print Edition
Print Edition
CITIGROUP Inc has "substantially" boosted its mortgage modification offers this month in response to the United States Treasury's call to speed up the process and help prevent foreclosures, the bank's top mortgage executive said.
CitiMortgage in a report released yesterday also said it helped 108,000 homeowners avoid potential foreclosure last quarter, a rise of nearly 30 percent over the previous period, as it ramped up participation in President Barack Obama's Home Affordable Modification Program, known as HAMP, to ease loan terms for up to 4 million borrowers.
CitiMortgage's latest report comes amid increased scrutiny of mortgage companies by the US Treasury, which earlier this month said it would step up pressure on companies to quicken the pace of easing loan terms for eligible borrowers. It is seen as a key effort that could help stop home price declines and preserve a nascent rebound in US housing.
CitiMortgage through July had started 27,571 trial modifications under HAMP, or about 15 percent of its eligible loans, the Treasury said on August 4. That lagged the 20 percent achieved by competitor JPMorgan Chase & Co, but exceeded the 4 percent done by Bank of America Corp.
"Based on the trends that I've been seeing in the month of August, I know that we are doing substantially better than that," Sanjiv Das, chief executive of CitiMortgage, said. "We know that we are doing much better than the 15 percent."
Foreclosures are still on the rise despite signs the US housing industry is stabilizing from its worst downturn since the 1930s, raising concerns burgeoning stock could keep the broader economy in recession. Delinquencies are also increasing.
Disappointment over lender responses to HAMP led Treasury officials to set a goal of 500,000 modifications by November. Through July, modifications under the program had topped 200,000, the Treasury said earlier.
Citi was able to ramp up its modifications under HAMP after increasing its loss mitigation staff by about 45 percent since the start of the year to 4,500, Das said.
The percentage of borrowers that defaulted again after receiving a modification from CitiMortgage was 29 percent or less between the first quarters of 2008 and 2009.
Most modifications to meet HAMP objectives have been done with interest rate reductions or extended repayment periods.
CitiMortgage in a report released yesterday also said it helped 108,000 homeowners avoid potential foreclosure last quarter, a rise of nearly 30 percent over the previous period, as it ramped up participation in President Barack Obama's Home Affordable Modification Program, known as HAMP, to ease loan terms for up to 4 million borrowers.
CitiMortgage's latest report comes amid increased scrutiny of mortgage companies by the US Treasury, which earlier this month said it would step up pressure on companies to quicken the pace of easing loan terms for eligible borrowers. It is seen as a key effort that could help stop home price declines and preserve a nascent rebound in US housing.
CitiMortgage through July had started 27,571 trial modifications under HAMP, or about 15 percent of its eligible loans, the Treasury said on August 4. That lagged the 20 percent achieved by competitor JPMorgan Chase & Co, but exceeded the 4 percent done by Bank of America Corp.
"Based on the trends that I've been seeing in the month of August, I know that we are doing substantially better than that," Sanjiv Das, chief executive of CitiMortgage, said. "We know that we are doing much better than the 15 percent."
Foreclosures are still on the rise despite signs the US housing industry is stabilizing from its worst downturn since the 1930s, raising concerns burgeoning stock could keep the broader economy in recession. Delinquencies are also increasing.
Disappointment over lender responses to HAMP led Treasury officials to set a goal of 500,000 modifications by November. Through July, modifications under the program had topped 200,000, the Treasury said earlier.
Citi was able to ramp up its modifications under HAMP after increasing its loss mitigation staff by about 45 percent since the start of the year to 4,500, Das said.
The percentage of borrowers that defaulted again after receiving a modification from CitiMortgage was 29 percent or less between the first quarters of 2008 and 2009.
Most modifications to meet HAMP objectives have been done with interest rate reductions or extended repayment periods.
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