Citi Marks $1 Billion to Refinance Mortgages
Citigroup (C) plans to lend $1bn in mortgages to qualified borrowers looking to refinance their primary residences. Today's announcement comes as part of the bank's four new initiatives that will cost up to a combined $8.25bn, as outlined in its second quarterly Troubled Asset Relief Program progress report. Citi's efforts to lend to the mortgage industry are not limited to the refinancing effort. The bank today touts $8.2bn of TARP capital already committed to the economy as of March-end, primarily to purchase mortgage securities in the secondary market and consequentially free up capital in mortgage lenders' balance sheets. Citi also worked with homeowners to prevent costly foreclosures on mortgages totaling more than $50bn. Citi prevented 80,000 foreclosures in Q109 alone, the bank says, with mitigation solutions outnumbering completed foreclosures by more than 10 to one. The new programs approved in the first quarter also include an initiative for the bank to lend up to $5bn to state and local governments, municipal agencies, universities and non-profit hospitals to fund long-term projects that should create jobs and economic growth. The bank says it will provide loans to double-A-rated municipal clients either to begin investment projects or refinance existing debt. Citi also plans to commit $2bn to supplier financing, purchasing trade receivables from and providing liquidity to small- and medium-sized businesses. As its final initiative announced today, Citi plans to lend $250m to consumers through financing departments at auto dealerships across the nation. The announcement comes just days after stress test results revealed Citi will need $5.5bn in fresh capital to weather the more severe economic conditions projected by federal regulators. Write to Diana Golobay. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments.