Citigroup reports success with foreclosure prevention
As the previous post mentions, Citigroup CEO Vikram Pandit was in town yesterday to speak at Washington University. He also visited with employees of the CitiMortgage division in O’Fallon, Mo., and announced some updated results for the company’s foreclosure prevention efforts. In the third quarter, Citi says, it had a nine-to-one ratio of foreclosures avoided to foreclosures completed. In the third quarter of 2008, the ratio was just 3.4-to-one.
In an interview, Pandit said the mortgage unit, which accounts for most of Citigroup’s 5,800 Missouri employees, has been growing and adding staff recently, in part to deal with foreclosure prevention. Part of the prevention effort, Pandit said, involves proactively contacting homeowners before they get too far behind in their payments. CitiMortgage also uses information from Citi’s credit-card unit to flag homeowners who may be headed for financial trouble.
Since 2007, CitiMortgage has helped 715,000 people keep their homes instead of losing them to foreclosure. But Pandit said his message to the staff yesterday was that the foreclosure crisis is far from over:
I told my people this morning that as hard as they’ve been working, they are going to have to work even harder in the months ahead. I see us being full force and full attention on this issue throughout the next year.
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David Nicklaus has covered St. Louis business for more than 25 years. His column appears three days a week on the Post-Dispatch business page. 
This is great news and I’m glad to see Citigroup taking steps to prevent foreclosures; however I still see a missing link in the system.
The underlying reason for these homeowners to be in default stems from a host of credit problems resulting in an unmanageable debt situation. While Citigroup efforts are helping to solve the biggest problem – A roof over people’s head – It does not address the other credit problems and debt management that is so desperately needed.
We would recommend that in order to qualify for this program , individuals and families enroll in a reputable Credit Counseling Services Program and get professional advice from certified credit counselors who will properly asses their needs. Firms who will take a candid and honest look at a realistic budget based on their situations and advise them what programs or services best fit their needs. In this way the lender, Citigroup, will now have an educated renter who is now in control of their finances. This ultimately will lead to these renters becoming responsible home owners in the future.
We would be delighted to be part of the success story with Citigroup. We tried to introduce a similar program over 2 years ago where we attempted to implement a rent to own program versus not qualifying for house and or losing a house. No one was interested at that time!
In addition, we’ll be happy to help anyone who is struggling with managing debt and place them in the right program that is appropriate for their unique situation.
A New Horizon Credit Counseling Services (800) 556-1548
http://www.anewhorizon.org
When the cost of foreclosing exceeds the benefits gained from it, then Citibank will pursue foreclosure prevention. This is exactly what we see. Foreclosures will subside when banks see that it is not in their financial interest to do it. Amazing how it all works itself out and how they find the solution to their own problem.