Citigroup will modify up to $20 billion in mortgages for borrowers current on their payments but at risk of falling behind, the bank announced this morning, mirroring similar moves by Bank of America and JPMorgan Chase. Citi will reach out to half a million borrowers, ultimately reducing monthly payments for 130,000 whose payments exceed an average of 40% of income, Wall Street Journal reports.
Citigroup’s plan will include both subprime and prime loans, modifying mortgages by lowering interest rates, extending the terms of loans or, in extreme cases, reducing the principal. The New York bank owns 1.5 million mortgages valued at $175 billion, of which 4.6% were at least 90 days past due at the end of the third quarter. It also services $600 billion in loans for investors.