In an effort to keep families in their homes, Citi announced Thursday that it has committed to participate in the administration’s second lien modification program (2MP).
The New-York based global financial services company is the fourth major servicer to sign on to the program, which was introduced nearly a year ago.
“It is our priority and commitment at Citi to help homeowners in need,” said Vikram Pandit, Citigroup CEO.
“The 2MP program will further improve the affordability on mortgages and help families facing financial distress stay in their homes.”
2MP was designed to work in tandem with the Home Affordable Modification Program and is aimed at helping homeowners who have a second home equity mortgage. According to Treasury estimates, up to 50 percent of at-risk mortgages also have second liens.
To qualify for the program, homeowners must successfully complete a trial modification on their first mortgage. Then, if the servicer of the borrower’s second line in a 2MP participant, the servicer must offer to modify the second lien or accept a lump sum payment from Treasury in exchange for fully doing away with the second lien.
Citi joins Bank of America, Wells Fargo, and Chase as participants in the program. Together, these four servicers own $400 billion of the nation’s $1 trillion second lien mortgage market. Based on fourth quarter 2009 filings with the Securities and Exchange Commission, BofA holds $149 billion in junior liens, Citi has $54 billion, JPMorgan Chase holds $101 billion, and Wells Fargo has $115 billion.
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