Citigroups Program of Reducing Repo Property Inventories
The number of mortgage loss mitigations and loan modifications completed under Citigroup Inc.’s program of reducing distressed property inventories in the first quarter declined by 12 percent, compared to last year’s fourth quarter.
The good news is that the pace of homeowners who have re-defaulted after having been helped by Citigroup also declined.
Loan modifications refer to changes in the mortgage terms such as reduction in interest rates. Loss mitigations refer to all other revisions done on a mortgage, such as short sales and extension of payments of arrears.
In last year’s fourth quarter, the bank’s loss mitigations increased by 33 percent compared to the third quarter.
Citigroup said the decline in loss mitigation activities in the first quarter is largely attributed to the relatively high number of payment deferment processes offered to borrowers during the holidays. The bank said it offered more payment extensions than usual during the past holiday season under its efforts to reduce repo property inventories.
Compared to last year’s first quarter, loss mitigations increased by 43 percent. Mitigations increased by 6 percent in the case of homeowners with FICO ratings above 660, but decreased in the case of homeowners with low FICO ratings.
Loan modifications continued to increase in the first quarter compared to last year’s first quarter, although lower than the number of modifications in the previous quarter. Citigroup said the 23-percent increase in loan modifications indicate the bank’s commitment to pursue its program of cutting down the number of homes added to repo property inventories.
The bank also explained that there is a significant reduction in foreclosures being processed and foreclosures completed because of foreclosure moratoriums imposed by several states and federal agencies.
Citigroup reported that nearly 8 percent of mortgage loans it has modified during last year’s fourth quarter later became delinquent by two months or more while a little over 2 percent later became delinquent by two months or more, the lowest levels reached since Citigroup started monitoring its mortgage modifications under its program of slashing repo property inventories.
Citigroup also reported that there were borrowers who defaulted in the third quarter, more than 6 months after they successfully modified their loans. The pace of this re-default however remained unchanged in the first quarter.
Citigroup reiterated its commitment to continue its program of reducing repo property inventories, although it expressed uncertainties about the rate of foreclosure filings in the next couple of years.
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