Citigroup is to help 500,000 mortgage customers by proactively selecting those who may need help in future months as the impact of the credit crisis continues to hit home.

Taking a lead from JP Morgan and Bank of America, the banking conglomerate has also placed a moratorium on foreclosures for the majority of mortgage customers.

The plan will see Citi contact half a million mortgage clients who have yet to fall behind in payments but may need help in keeping up. The bank will then offer to alter mortgage terms or ease the repayment levels where necessary.

The affected customers, whose mortgages are worth about $20bn (£13bn), will be selected by focusing on areas of the US economy where housing markets are facing severe problems due to the downturn in economic fortunes.

Daily Telegraph