This NPR story is a little short on details, but the gist of it describes how banks (CitiMortage, JPMorgan and Bank of America ) are promising to lower interest rates for their borrowers, and CitiMortgage in particular is pledging to reach out to people that aren’t even in default yet. Sanjiv Das, the CEO of CitiMortgage, “says the lender is going to contact homeowners in parts of the country with rising unemployment and big drops in home prices. He expects that about 130,000 of them will need help. They’ll be offered lower monthly payments.” The group also said late on Monday night that it will not “foreclosure or complete a foreclosure sale on any eligible borrower who seeks to stay in a home if it is the borrower’s principal residence, the homeowner is working ingood faith with Citi and has sufficient income to make affordable mortgage payments,” according to the Associated Press.
JPMorgan Chase & Co. also has a plan to reach out to 400,000 mortgage holders (this via NPR, as well).
The New York-based banking giant has already modified about $40 billion in mortgages, helping 250,000 customers since early 2007.
JPMorgan will not put any loans into foreclosure as it implements the expanded program over the next 90 days.
The $70 billion estimate is projected over a two-year period, but could be larger and last more than two years — as long as the company sees a need among troubled borrowers, said Charlie Scharf, JPMorgan’s chief executive of retail financial services.