Citigroup joined JP Morgan Chase, Bank of America, FDIC (IndyMac) and Wells Fargo (after it completes its purchase of Wachovia), in unilaterally attempting to do loan mods for about 500,000 homeowners who are holding about $20 billion in mortgages.

Citigroup intends to stop foreclosures for homeowners who live in their homes and have sufficient income to make lower payments. An important distinction is that this program only covers loans Citi owns, vice loans it has sold to investors (but may be servicing).

Intense political pressure is being applied to lenders to stop foreclosures. For example, as we reported last week, Governor Schwarzenegger wants to stop California foreclosures for 90 days, allowing lenders and homeowners time to work out their loans.

And – we are starting to see the results in a much lower inventory of REO properties locally…