Rather than waiting for a government solution, Citi is joining institutions such as Bank of America and J.P. Morgan in preventing foreclosures.  It is estimated that the Citi effort alone will prevent 130,000 foreclosures on $20,000,000,000 of mortgages.  That’s $20 billion, or $20,000 million.  In addition, they will actively reach out to a half million homeowners who aren’t actually behind on payments, but might be at risk of falling behind in the future.

Help from Citi will include rate freezes, rate reductions, principal reduction, and/or entending the term of the mortgage itself to make the payments more affordable according to CNN.  Of course, not all homeowners will qualify for help from Citi. To qualify, a homeowner must be current on payments, be living in the home, and must be able to make what is described as a “reasonable payment.”  In addition, Citi has to actually own the mortgage itself — it cannot have already been sold off to investors.

If you are behind on your mortgage, or near the brink of being so, please look into your options.

And if you are considering buying a bank-owned property, be sure to check out the story of Peter Hong, via The Mess That Greenspan Made. The only thing I’d like to point out is that I have one disagreement with Mr. Hong’s statement on “lowballing“.  He quotes an expert as telling him “If a home you want has been on the market for several weeks, it is probably overpriced”.  While that might be so in Los Angeles, it is not so in Vegas.  At least in Vegas, there is a lot of fairly priced REO action and you are unlikely to get a home by lowballing.  First, most — most – banks have a policy of regular price cuts;  if it isn’t moving, they will drop the price untl it does.  Second, on the market a few weeks is no big deal when you have several months worth of housing on the market. And finally, I have seen properties on the market for several months suddenly get multiple offers.  There is just no way to tell when the “right person” is going to see a house.  My advice on making offers is to a) know your budget; b) ask your Realtor to run some “comps” in the area; and c) find out if any comparable homes have sold in the last 6 months and for how much (don’t forget to compare that to the asking price).  This advice should still be good no matter what happens to the housing market in the future.

Update: the Bush Administration should be unveiling its own foreclosure prevention scheme centered on Fannie and Freddie later today.