NEW YORK (
is suspending home foreclosures in areas affected by the
oil spill, starting Thursday.
Citigroup said the program would allow distressed homeowners with mortgages serviced by CitiMortgage "to remain in their homes during these uncertain times as the Gulf communities respond to the oil spill and its economic repercussions."
During the suspension, effective June 17 through September 17, 2010, borrowers with first mortgage loans owned by CitiMortgage and who meet certain other criteria will not be subject to foreclosure sales or foreclosure notifications. While CitiMortgage does not own all of the loans it services, the company hopes to help as many borrowers as possible with this initiative, the bank said.
"By putting CitiMortgage foreclosures on hold, we aim to ease the burden on residents of the Gulf states so they can concentrate on the most urgent matters facing them," CEO Vikram Pandit said in a statement. "In the midst of this crisis, we will continue to explore ways to help people avoid foreclosure so they and their families can remain in their homes and have one less thing to worry about."
The release did not provide a value of the amount of mortgages Citigroup owns in the Gulf area.
The program calls for CitiMortgage to halt all foreclosure sales on first mortgage accounts in highly impacted coastal areas while evictions on real estate owned properties (REO) will also cease during this time. CitiMortgage borrowers occupying residences in zip codes within approximately 25 miles of affected coastal areas will be eligible for the program.
Citigroup is also working closely with other customers in the Gulf region through its consumer finance unit, CitiFinancial.
Shares of Citigroup hit $4 briefly this afternoon but the stock was not able to hold on to the level at market close. With roughly 400 million shares changing hands -- half the amount of trading that normally goes on in the stock -- shares ranged between $3.93 and $4 on Wednesday and finished the session at $3.99.
-- Written by Laurie Kulikowski in New York.