Citigroup ( C) announced a new plan Tuesday that gives the recently unemployed temporary relief on their mortgage payments. Homeowners who have lost their jobs and are 60 days or more behind on their Citigroup mortgage could see their payments reduced to $500 for three months.The Homeowner Unemployment Assist plan is designed to keep jobless homeowners in their home despite the setback of a layoff. "Our Homeowner Unemployment Assist program is intended to serve as a bridge toward a longer-term solution, helping homeowners stay in their homes and in their communities while they get their feet back on the ground," said CitiMortgage CEO Sanjiv Das in a statement announcing the plan. Citigroup also anticipates reducing some credit losses on mortgages through the program, which helps their own balance sheets as well. As detailed in their statement, CitiMortgage will stay in contact with their customers during the three month period as the homeowners try to find new jobs. Borrowers who do find work will resume their original mortgage plan, or they can apply for a long-term loan modification. If they are still jobless after three months, Citi says they "will work with customers on a case-by-case basis to explore the best solutions for the customer." To benefit from the program, homeowners must have involuntarily lost their jobs and meet this criteria:
- Have a first mortgage loan on their principal residence that is owned and serviced by CitiMortgage
- The mortgage must conforms to government sponsored enterprise (GSE) limits at the time of origination
- Be 60 days or more delinquent on their mortgage or in foreclosure;
- Have enough money to make the reduced payment;
- Meet all insurer or guaranty requirements; and
- Are not eligible to participate in the FDIC's long-term modification program as adopted by Citi.