Citigroup Inc. (C) joined the ranks of financial institutions offering enhanced loan modification programs on Tuesday, when it announced its initiatives to “proactively help potential at-risk borrowers” with a program that will halt certain foreclosures, reduce monthly payments and cut interest rates to as low as 1 percent for up to 2 years. About 136,000 mortgage customers are expected to qualify for the program, resulting in the workouts of over $20 billion in loans. The program will consist of two major initiatives: launching Citi’s Homeowner Assistance program, and putting a foreclosure moratorium in place for certain Citi-owned mortgages. Over the next six months, the program will “preemptively reach out to a select group of 500,000 homeowners” who are not currently behind on their mortgage payments, but may require help in the near future. Citi said in a press release Tuesday that it is focusing particularly on borrowers in areas that are facing or are likely to face “extreme economic distress.” The plan encompasses a foreclosure moratorium that will not only prevent new loans from entering the foreclosure process, but it will also prevent any loan already in the foreclosure process from being completed — so long as Citi owns the loan and the borrower qualifies for the new loan modification plan.  Citi also said it’s working with investors to secure a broader plan that will include mortgages Citi services but does not own. “It today’s economic environment, Citi continues to build on its long-standing efforts to develop new ways to help our customers remain in their homes,” said Sanjiv Das, CEO of CitiMortgage. Das said the bank’s existing loan modification program has already helped 370,000 homeowners avoid foreclosure since 2007. Citi’s plan closely resembles the one put into place at IndyMac by the Federal Deposit Insurance Corporation after it took over the bank in mid-July. Citi becomes the fourth major bank to garner press for a pronouncement of mass modifications, and an associated freeze in foreclosures. The FDIC kicked off the loan modification party in August by announcing a plan to refinance troubled homeowners into “affordable” mortgages at IndyMac Federal Bank; Bank of America Corp. (BAC), saddled with legal pressure tied to its Countrywide unit, later announced its own $8.4 billion loan modification program/settlement in early October, which is also expected to target 400,000 borrowers.  Just last week, JP Morgan Chase & Co. (JPM) launched an aggressive loan modification plan estimated to impact roughly $70 billion in mortgages. Write to Kelly Curran at [email protected] Disclosure: The authors held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.