We should always look for alternatives to the bailout mentality, where made up money is thrown all around at random in hopes of “stimulating” the economy. Citigroup appears to be taking a measured approach to the current mortgage crisis.
Citigroup says it is imposing a moratorium on most foreclosures as part of a series of initiatives aimed at helping at-risk borrowers remain in their homes — making Citi the latest big bank to announce sweeping efforts to try to curtail losses from souring mortgages.
Citi said late Monday it won’t initiate a 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 in good faith with Citi and has sufficient income to make affordable mortgage payments.
Citi said it is also working to expand the program to include mortgages the bank services but does not own.
Additionally, over the next six months, Citi plans to reach out to 500,000 homeowners who are not currently behind on their mortgage payments, but who are deemed as potentially needing assistance to keep current with their payments. This represents about one-third of all the mortgages that Citigroup owns, the bank said.
Citi plans to devote a team of 600 salespeople to assist the targeted borrowers by adjusting their rates, reducing principal, or increasing the term of the loan, steps known in the mortgage industry as a workout.
Irresponsibility should not be rewarded. The other side of the coin is that our society does a terrible job of teaching individual responsibility. We teach the exact opposite from the top down. Congress steals from the people and redistributes the wealth however they see fit. They claim this is their mandate. Maybe it is their mandate. Nevertheless, when the power structure is designed to foster irresponsible fiscal behavior, it is nice to see some signs that common sense is being used, at least on a limited scale.
If people can be kept in their homes their lives are somewhat more stable than they would likely otherwise be. Citigroup benefits from less foreclosure losses. I don’t see any losers when it comes to taking reasonable steps to keep people in their homes.