US Holds onto Citigroup Shares

Thursday, December 17, 2009

The U.S. Department of the Treasury has temporarily backed out of plans to sell its 34 percent stake in Citigroup Inc. due to a tepid response by investors to a massive stock offer.

"Based on today's offering price, [the] treasury has decided not to participate in the equity offering," an anonymous department official familiar with the matter told The Associated Press. The government said it would have lost 10 cents a share in the latest offering.

Meanwhile, the AP reports Citigroup will suspend foreclosures and evictions for 30 days in a temporary break for about 4,000 borrowers during the holiday season. The holiday reprieve should help some 2,000 homeowners with scheduled foreclosure sales and another 2,000 due to receive foreclosure notices. The suspension means Citigroup will halt foreclosure sales and stop evicting homeowners from properties it has already seized.

The New York-based bank said Thursday the suspension will run from this Friday December 18 through January 17. It applies only to borrowers whose loans are owned by Citigroup.

"We want our borrowers to have a much less stressful time, to spend their time with their families during the holidays as opposed to worrying about their homes," Sanjiv Das, head of the company's mortgage division, said in an interview.

Most major lenders suspended foreclosures last winter while the Obama administration developed its $75 billion loan modification program. Foreclosures picked up again after those suspensions lifted. In recent months, they have fallen as banks evaluate whether borrowers qualify for the government program.

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