Citigroup Inc. is working with U.S. senators to hammer out legislation that would allow bankruptcy judges to modify individual mortgages, potentially helping borrowers in Connecticut and elsewhere avoid foreclosure, according to a published report today.
Citing unnamed sources close to Citi, The Wall Street Journal said the financial services industry is reversing its previous opposition to so-called “cramdown” rules that force banks to accept modified mortgages from customers who have filed for bankruptcy protection.
Citi declined to comment on the Journal report.
Citi has been among the hardest hit banks by the ongoing mortgage and housing market turmoil. Analysts widely expect Citi to post a fifth straight quarterly loss when it reports fourth-quarter results.
The New York-based bank also received hundreds of billions of dollars in aid from the government late last year as investors worried about mounting mortgage and loan-related losses at Citi. (AP)
