I just read this report from the Associated Press that the US Government is about to close a deal that will increase it’s onwership in the beleaguered owners of Citimortgage, Citigroup. This will result in another large cash infusion in the bank while at the same time increasing government’s control on that financial institution. It will then demand changes on the board of directors, and other changes it has not yet disclosed.

According to that report Citigroup preferred shares owned by the government will converted into common shares if private investors do the same, thus turning government’s share in the bank to a whopping 40 percent up from the eight percent that it controls now.

Citigroup has already received about 45 billion in bailout money from the US government, which has also guaranteed to cover losses in risky investments like sub prime mortgages. Citigroup owns Citimortgage, one of the largest home mortgage lenders out there. They offer some refinancing help, maybe some lower interest rates.

How does this affect home owners? We’re not too sure yet, but what we can be sure of is that government is really going to take control of a lot of private companies that are wiling to accept money from it. I personally do not know what this could mean in the next 5 years for me as a home owner or as someone with a home mortgage. Maybe it could mean lower refinancing rates, better deals for people with bad credit loans, the future is quite murky right now.

Related posts:

1. Citigroup to Sell it’s Mortgage Rights to Wilbur Ross Unit

2. Week Ahead: Government Spending to Boost Sentiment expected by Market

3. Home Loan / Foreclosure Help from the Government

4. TARP Speculation – Mortgage Help in the Works?

5. Mortgage Delinquencies Up – May 30, 2009