NEW YORK (
(C - Get Report)
has joined other large banks like
(JPM - Get Report)
Bank of America
in participation of the government's 2MP program, which will help struggling borrowers modify second mortgages through the Home Affordable Mortgage Program.
Citigroup, one of the largest mortgage servicers in the U.S., says it is committed to keeping families in their homes.
"It is our priority and commitment at Citi to help homeowners in need," CEO Vikram Pandit said in a statement on Thursday. "The 2MP program will further improve the affordability on mortgages and help families facing financial distress stay in their homes."
JPMorgan Chase announced on Monday that it would participate in the 2MP program, which is designed to work in tandem with HAMP to lower homeowners' payments on both their first and second mortgages, such as home equity loans.
Under the second lien program, borrowers may see the interest rate on the second mortgages reduced as low as 1% for five years. The program also provides a financial incentive to borrowers, servicers and investors if the modification is successful, JPMorgan Chase said.
To qualify, homeowners must successfully complete a trial modification on their first mortgage, JPMorgan Chase says. When it implements 2MP, Chase will seek to modify second liens whether the first loan is serviced by Chase or by another loan servicer.
Last year, Chase offered 600,000 loan modifications to homeowners. It also has opened dozens of Chase Homeownership Centers to provide face-to-face loan counseling to struggling homeowners and will have a total of 51 centers by this spring, the company said.
Citigroup has helped more than 825,000 families avoid foreclosure since 2007, through various programs both via the government and its own solutions, such as the Citi Homeowner's Assistance Program, the Citi Unemployment Assist Program and most recently, the launch of the Citi Foreclosure Alternatives Program, it says.
Citigroup shares were up 3% to $4.286 at the open.
--Written by Laurie Kulikowski in New York.