Foreclosures For Sale, News, Articles And Foreclosure Information

Citigroup Inc. has launched an outreach program for its 500,000 borrowers who paid their mortgage payments on time but live in areas with high unemployment rate or declining home values. This program aims to help homeowners avoid initiating foreclosure proceedings.

Citigroup will establish a moratorium on foreclosures provided that the borrower currently resides in the mortgaged home, is employed and has a good business relationship with the company.

Meanwhile, the U.S. federal government has launched a loan modification program for delinquent borrowers to help them avoid filing for foreclosures.

To be eligible for the mortgage aid program, borrowers have to be only 90 days delayed in their loan payments and their loan principal should be equal to 90 percent of the house’s value.

The program will try to match up borrowers’ loan payments to as much as 38 percent of their gross household income by lowering interest rate, providing longer repayment scheme or converting a part of the loan principal into a balloon payment with no interest.

However, the mortgage aid plan will cover only a fraction of about 4 million delinquent borrowers.

Sheila Bair, chairman of the Federal Deposit Insurance Corp., said that the plan is just a part of what the country needs to restructure the mortgage market. She advocated the use of some of the bank rescue program’s $700 billion funds for the loan modification efforts.

Michigan has an unemployment rate of 8.7 percent exacerbated by the retrenchment in the automobile industry. Home prices in the state declined by 17.2 percent as of August. And for over a year now, Michigan has been ranked as one of the top 10 cities in the U.S. with high foreclosure rate.

The state’s delinquency rate for the 2008 second quarter was 8.55 percent, the second highest rate in the country.