Citi Says Loan Modifications Growing Substantially
In response to the U.S. Treasury’s call to speed the process and help prevent foreclosures, Citigroup Inc has significantly boosted its mortgage modification offers this month.
In a report released on Tuesday, CitiMortgage said that it has already helped 108,000 homeowners in the last quarter to avoid potential foreclosure, a rise of nearly 30 percent over the previous period.
It has participated fully in the President Barack Obama’s Home Affordable Modification Program, known as HAMP, to ease loan terms for up to 4 million borrowers.
Earlier this month, the U.S. Treasury said that it would put pressure on companies to quicken the pace of easing loan terms for eligible borrowers. The latest report of CitiMortgage has come in the course of increased inspection of mortgage companies. It is seen as a key effort to help stop the declining home prices and offer a promising come back of U.S. housing.
According to the Treasury, throughout July, CitiMortgage had started 27,571 trial modifications under HAMP, or about 15 percent of its eligible loans. Although this was 20 percent behind the competitor JPMorgan Chase & Co., but exceeded the 4 percent done by Bank of America Corp.
CitiMortgage is the fourth largest U.S. mortgage servicing company. In spite of the signs that the U.S. housing is reviving from its worst decline since the 1930s, foreclosures are still on the rise. This has raised the concerns that escalating inventories could keep the broader economy in recession, while the delinquencies are also on the upswing.
The treasury officials have set the goal of 500,000 modifications by November, due to their disappointment over lender responses to HAMP.
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