Citi to support novel attempt at mortgage relief?

January 8, 2009 | By Jim Kim

Citigroup is said to be seriously considering supporting a plan that would let troubled mortgage owners save their homes via bankruptcy court, reports CNNMoney.com. The idea--spearheaded by Senator Richard Durbin, who is in talks with Citi about the plan--would give bankruptcy court judges the ability to wipe away or reduce mortgage debt, allowing people to keep their homes. As I understand, some states already allow people to hang onto their residence.

The idea has gathered some unexpected support. The National Association of Home Builders has dropped its opposition to the idea, and the National Association of Realtors is mulling whether it should follow suit.

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