Out-of-work homeowners with Citigroup mortgages may soon be getting a break from their lender. Citigroup announced that it will be cutting mortgage payments to an average of $500 a month for three months under its new Homeowner Unemployment Assist program, reports The Associated Press (“Citigroup to Cut Mortgage Payments for Jobless,” March 3, 2009).

“Our Homeowner Unemployment Assist program is intended to serve as a bridge toward a longer-term solution, helping homeowners stay in their homes and in their communities while they get their feet back on the ground,” said Sanjiv Das, CitiMortgage chief executive.

According to the AP, unemployed homeowners must meet certain qualifications to be considered eligible for assistance under the new program:

• Be 60 days or more past due on their mortgage, or be in foreclosure
• Have the financial resources to make the reduced monthly payments
• Have a primary residence with a first mortgage that is owned and serviced by CitiMortgage Inc.
• Have a home loan that meets the general conforming loan limit established by the government, which, in most U.S. markets, is currently is set at $417,000
• Meet all insurance and guaranty requirements

Homeowners who take part in the three-month program but are still without jobs after its completion will have their home loan situation examined by Citigroup to determine the best payment option. Participating homeowners who find employment during those three months may opt to return to their original payment schedule, or, if qualified, may ask Citigroup for a mortgage modification.

Citigroup expects that the new initiative will help thousands of homeowners over the next two years and that the new program may be expanded, after initial evaluations, to include homeowners who have just recently fallen behind on their payments and those who are current on their mortgage but in danger of falling behind.

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