Citigroup Modifies Mortgage Loans as Unemployment Rates Rise

Citigroup Inc. announced today that it will modify the terms on $20 billion of mortgages. CitiMortgage – the company’s mortgage unit, will lower interest rates on loans, extend loan lengths and in extreme cases reduce the amount of debt owed. The program will be offered to all borrowers, regardless of credit scores, in an effort to prevent more delinquencies.

Sanjiv Das, CEO, CitiMortgage, says, “The real problem in the U.S. now is increasing unemployment. We are finding that people across the board need help.”

The unemployment rate was 6.5% in October, up from 4.7% a year earlier. That translates into 10.1 million unemployed workers, compared with 7.1 million last year.

Citi aims to help more than 500,000 of its mortgage customers and says about 130,000 of them will see lower monthly mortgage payments. The modification program has been tested for the past three months. Average monthly loan payments have been reduced by about 40%.