The second-largest U.S. bank by assets expects in the next six months to reach out to 500,000 borrowers it said may need help to stay current on payments. It is focusing particularly on areas "likely to face extreme economic distress."

Citigroup also agreed to halt foreclosures for struggling borrowers who live in their homes, have sufficient income to afford lower payments, and are making an effort to work out their problems with the bank.

Monday's changes cover borrowers whose mortgages Citigroup owns, rather than those it has sold to investors. Citigroup said it also streamlined procedures to rework delinquent home loans, modeling it on a Federal Deposit Insurance Corp plan to ease terms for many IndyMac Bancorp Inc borrowers.

The bank said it has since 2007 already taken steps to help 370,000 borrowers avoid foreclosure. It said it ended September with $202 billion of North American residential real estate loans and a $646.5 billion mortgage servicing portfolio.