Citigroup halts foreclosures in Gulf region
The bank will stop foreclosure proceedings until September because of the oil spill. 'Borrowers are hurting,' the bank says.
The bank announced a three-month suspension of foreclosure sales and notifications, as well as evictions on possessed properties for qualifying borrowers in the Gulf region with first mortgages held by CitiMortgage.
The economic impact of the environmental disaster on the region is still unknown, but it is becoming clear that borrowers are hurting and banks need to respond, said Sanjiv Das, chief executive of CitiMortgage.
His unit will cooperate with CitiFinancial, the bank's consumer finance unit, to help customers, the Journal said. CitiFinancial refinances mortgages mainly for customers with low credit scores and has branches in the Gulf area. Das said he expected other banks to follow with programs like Citi's.
In the aftermath of Hurricane Katrina, banks implemented broad payment-suspension plans for the Gulf region in response to the destruction of homes and the distress borrowers faced.
While "Katrina hit with great force" at once, the current disaster caused by the April 20 explosion of a BP PLC oil rig "is gradually evolving into a crisis for our customers," Das told the Journal. "We cannot grasp the impact just yet."
"There is a lot of anxiety," and several customers contacted Citi about the disaster's impact on their jobs or businesses, Das said.
Such concerns prompted Citi to initiate the program to give customers more time to work out their finances.
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