Citibank 2011 Annual Report Download - page 109

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CFNA Temporary Mortgage Adjustment of Terms. This
short-term modification program is similar to the long-term program discussed
above, but is targeted to CitiFinancial’s consumer finance borrowers with a
temporary hardship. Under this program, which can include both an interest
rate reduction and a term extension, the interest rate is reduced for either a
five- or an eleven-month period. At the end of the temporary modification
period, the interest rate reverts to the pre-modification rate. Similar to the
long-term program, borrowers must make a payment at the reduced payment
amount prior to the adjustment of terms being processed to qualify, and they
must meet the verification and validation requirements discussed above. If
the customer is still undergoing hardship at the conclusion of the temporary
payment reduction, an extension of the temporary terms can be considered
in either of the time period increments above, to a maximum of 24 months.
In cases where the account is over 60 days past due at the expiration of the
temporary modification period, the terms of the modification are made
permanent and the payment is kept at the reduced amount for the remaining
life of the loan.
Credit Cards
Credit card long-term modification programs. Citi’s long-term
modification programs for its Citi-branded and retail partner cards borrowers
are designed to liquidate a borrower’s balance within 60 months. These
programs are available to borrowers who indicate a long-term hardship.
Payment requirements are decreased by reducing interest rates charged to
either 9.9% or 0%, depending on the borrower’s situation, and are designed to
fully amortize the balance. Under these programs, fees are discontinued and
charging privileges are permanently rescinded.
Universal Payment Program (UPP). The UPP is a short-term
cards modification program offered to Citi-branded and retail partner cards
borrowers and provides short-term interest rate reductions to assist borrowers
experiencing temporary hardships. Under this program, a participant’s
APR is reduced by at least 500 basis points for a period of up to 12 months.
The minimum payment is established based upon the borrower’s specific
circumstances and is designed to amortize at least 1% of the principal
balance each month. The participant’s APR returns to its original rate at the
end of the program or earlier upon failure to make the required payments.
Modification Programs—Summary
The following table sets forth, as of December 31, 2011, information relating to Citi’s significant U.S. loan modification programs.
In millions of dollars
Program
balance
Average
interest rate
reduction
Average %
payment relief
Average
tenor of
modified loans
Deferred
principal
Principal
forgiveness
U.S. Consumer mortgage lending
(!-0 $ 4,282 4% 41% 30 years $ 558 $ 7
#3- 2,061 3 21 26 years 94 1
&(!6!æ 4,117 2 18 28 years — —
#&.!æ!DJUSTMENTæOFæ4ERMSæ!/4 3,796 3 23 29 years — —
2ESPONSIBLEæ,ENDING 1,694 2 18 28 years — —
#&.!æ4EMPORARYæ-ORTGAGEæ!/4 1,570 2 N/A N/A — —
North America cards
,ONGTERMæMODIFICATIONæPROGRAMS 5,035 15 — 5 years — —
500 515 20 N/A N/A — —