Banks moving to adjust mortgages

WHEATON—Home mortgage institution, Citibank, announced Nov. 11 that it was imposing a moratorium on foreclosures in regions suffering the worst from the economic slowdown. In total, the corporation is offering to renegotiate interest rates, reduce the principal or increase the term of the loan for homeowners owing 90 percent of the purchase price on homes whose market value has dropped significantly. Communities in Michigan and Ohio stand to gain the most benefit, since the unemployment is soaring there.

According to a Nov. 11 Associated Press report, “500,000 homeowners” are eligible for assistance if they meet the criteria—homeowners who are up-to-date on their mortgage payments but deemed to be potentially at risk of falling behind.

Meanwhile the White House is backing off its proposed mortgage relief plan. Subprime mortgage holders have been eliminated from a plan to modify terms and rates, according to a Nov. 12 story in the New York Times.