With drips and drabs of the BP oil spill washing up on their shores, Gulf Coast residents have a lot on their plate. Now one big private lender is cutting Gulf residents a break by slapping a moratorium on foreclosure activity. Here’s the lender — and here’s the deal.
The Deepwater Horizon spill, located just 40 miles off the coast of Louisiana, is already pegged as the worst environmental disaster in history. Now CitiGroup (Stock Quote: C) is stepping up to the plate to cut some Gulf area homeowners a break, placing a three-month moratorium on home foreclosures — from June 17 to Sept. 17. The bank says it recognizes the economic hit that the Gulf Coast is taking as a result of the BP spill, noting in a company statement that key industries like fishing, tourism and oil and gas exploration have all been decimated by the disaster.
Geographically, Citi limited the foreclosure moratorium to 515 counties in Alabama, Florida, Mississippi and Louisiana — all within 25 miles of the Gulf Coast region.
BusinessWeek is already out with a report that the oil spill will severely cut into Gulf home values, triggering a $4.3 billion devaluing of household properties in the region. In addition, some of the $20 billion oil fund negotiated between the White House and BP could also be used to alleviate local homeowners’ mortgage payments.
"We hope that with this suspension we can help ease some of the financial stress for our customers in the affected Gulf region," said Sanjiv Das, President and Chief Executive Officer of CitiMortgage. "Many of them are facing financial hardship as a result of the spill, and we want to help support them during this very unsettling time," Das added.
According to the financial giant, Citi can only halt foreclosures on those home loans it owns in the first place. The bank did say that it would also stop evictions on real estate owned properties during the three-month timeframe.