Citigroup Inc. and Fannie Mae are taking steps to alleviate some of the stress on struggling homeowners in the coastal areas affected by the oil spill in the Gulf of Mexico.
Citigroup said Wednesday it is suspending foreclosures on first mortgages that it owns in the areas hardest hit by the spill.
The three-month moratorium begins Thursday and runs through Sept. 17. Borrowers who live in ZIP codes within a 25-mile radius of affected areas in Louisiana, Alabama, Mississippi and Florida are eligible for the suspension. The company also said it will cease evictions on repossessed properties during that time.
"We felt that in these trying times it was important for us to step up and allay the anxiety that families have around remaining in their homes," said Sanjiv Das, head of CitiMortgage, in an interview after the company's announcement.
Das said Citigroup is looking at ways it can assist its small business clients hurt by the spill, too.
Meanwhile, companies servicing Fannie-owned loans can suspend or reduce mortgage payments for up to 90 days for borrowers in affected areas, the government-sponsored enterprise said Wednesday.
Servicers have additional flexibility to evaluate other alternatives on a case-by-case basis following the initial 90-day period.
Their options would include a three-month extension or loan modification.