Mortgage Help from Citigroup?

Citigroup just announced a plan to help homeowners who have been laid off. It is called “Homeowner Assist”. They said they would provide an opportunity for a homeowner to pay just $500 per month for three months. Note* this is a temporary solution. The catch…….the home owner must be unemployed under 6 months, provide proof of unemployment and has to be at least 60 days behind in their payments on their first mortgage, (2nd mortgages and home equity loans do not qualify). While it is a step in the right direction, the damage to a homeowner’s credit has already taken a huge hit. There is no work out for the newly unemployed who was previously current on their mortgage. So there is no way to save good credit when faced with an unavoidable situation…unemployment. One would have to let payments go unpaid for two months in order to qualify. At this point, the homeowner already will have 1 60 day late and a 30 day late hit on their credit report not to mention the past due payments for 2 months. In addition, Citigroup doesn’t specify what happens with the past due months nor do they guarantee that the previous and ensuing months will be reported as “current”. Furthermore, with long term unemployment this may be a matter of postponing the inevitable, foreclosure. There may be few unemployed in this economy that will find employment within 3 months thereby improving their own negotiation with their current situation. Is this program an actual help to the homeowners in this situation? While Citibank says that if you can’t find work in three months they will work with you on a case by case basis I would contend that this is merely an empty offer that really does little to help the homeowner avoid losing their home, creating an opportunity to save their home and avoid ruining their credit. There is little that will make a bank work with you in these situations. Until I see the results I would venture an educated guess that again, Citibank is positioning itself in the eyes of the bailout government by outwardly offering something that has virtually little substance.

Citigroup, I challenge you to make me take this opinion back by proving to me you are true to your word.