Citigroup is suspending foreclosures and evictions for about 4,000 homeowners from today through Jan. 17, in a temporary break for distressed borrowers for the holidays. The 30-day suspension only applies to Citi-owned mortgages. Properties already seized will not be sold, and homeowners in those properties will not be evicted for the suspension period.
After scrambling for days to reach a deal with U.S. regulators, banking giant Citigroup – one of the most troubled icons of the financial crisis – announced today it has reached an agreement to repay $20 billion in bailout funds and “terminate the loss-sharing agreement” with the government. “We owe the American taxpayers a debt of gratitude and recognize our obligation to support the economic recovery through lending and assistance to homeowners and other borrowers in need,” said Citi Chief Executive Officer Vikram Pandit.
It is shaping up to be a whirlwind stay in Washington, D.C. next week for Citigroup Chief Executive Vikram Pandit, as he reportedly plans to meet with President Obama and try to negotiate a bailout repayment deal with officials. Pandit reportedly wants out of the unenviable spot of being the remaining top bank chief not to orchestrate a repayment of Treasury bailout funds under the Troubled Asset Relief Program. He is reportedly seeking to hash out a deal next week.
Mortgage lenders have failed to deliver under the Obama Administration’s Making Home Affordable program that is suppose to stem foreclosures by reducing loan payments, a U.S. Treasury official said. Obama administration officials on Monday will announce a campaign to pressure lenders to reduce payments for a larger number of homeowners, and make more loan modifications permanent, the Treasury official told the New York Times.
Citigroup helped about 130,000 homeowners avoid foreclosure on mortgages valued at more than $20 billion in the third quarter, Citi reported today. Citi’s loss mitigation results outnumbered completed foreclosures by more than 15 to one, nearly four times the rate it reported in the third quarter of 2008.
A key Democratic senator has joined a prominent consumer group in urging the Federal Reserve to act now, three months before reform laws take effect, to stop “unfair” rate hikes and other “abusive” practices by credit card issuers. Sen. Carl Levin, D-Michigan, chairman of the Permanent Subcommittee on Investigations, today asked the Fed to clarify and strengthen the Credit CARD Act of 2009, enacted in May but slated for full implementation Feb. 22.
The “Reasonable Penalty Fees” section of the soon-to-arrive credit card reform laws has certainly not gone unnoticed by the major card issuers. It is one provision that provides fertile ground for potential new fees that card providers could be allowed to implement as long as the fees are “reasonable and proportional.”
A prominent consumer group has formerly asked the Federal Reserve to stop credit card issuers from “unfairly hiking interest rates” and put a halt to other dubious practices ahead of credit industry reform laws.
Citibank is offering their customers an “earn interest back” option to offset higher interest rates. The catch: they need to spend as much as $1,000 minimum every month to get a 10 percent reduction of the interest charge.
Baffled consumers at gasoline pumps on Oct. 21 learned that Citi had closed their gas credit card accounts without warning. It is strange days indeed in the credit industry, and the move by Citi to shut down card accounts linked to gasoline purchases has even surprised seasoned industry observers.