While the banks have loudly proclaimed their desire to help struggling homeowners, most of those efforts have been little more than public relations campaigns.
So any new foreclosure-prevention program should be viewed with skepticism until it proves to be worthwhile.
Having said that, Citi has a new program to help out-of-work homeowners who’ve fallen behind on their mortgage payments.
“Homeowner Unemployment Assist” allows borrowers to skip interest and principal payments for up to three months.
The interest will be forgiven and any unpaid principal will be due when the loan is paid off.
The only thing borrowers who qualify for the plan must continue to pay is the monthly contribution to their escrow account, which covers taxes and insurance.
Homeowners who land a job within the three-month extension period are expected to immediately resume their full payments.
If the new job pays substantially less than the old one, Citi will consider a long-term loan modification under its Homeowner Assistance program.
That reduces the monthly payments to no more than 38% of the borrower’s pre-tax income by reducing the interest rate, extending the length of the loan and potentially forgiving some of the principal.
Citi will review the finances of homeowners who are still unemployed after three months to determine if they qualify for further assistance.
To find out if you’re eligible call 1-800-283-7918 or go to Citi’s Office of Homeownership Preservation.