Citigroup Inc. is placing a moratorium on most foreclosures and plans to work with 500,000 homeowners it thinks might default on payments in the near future, the Associated Press reported.

This new initiative is among several that banks have announced lately to reduce their losses from bad mortgages. JPMorgan Chase & Co. announced last month that it would help 400,000 homeowners with $70 billion in loans over the next two years, and Bank of America Corp. has announced two plans this year to cover more than $120 billion in unpaid balances. Fannie Mae and Freddie Mac also are working on plans to reduce principal or interest rates on some loans and extend the terms of others, according to Bloomberg.

Citigroup said it would not seek to foreclose or complete a foreclosure sale on any property owned by an eligible borrower who plans to stay in the home as a principal residence, is working in good faith with the company and has sufficient income to make affordable mortgage payments. It also will work with 500,000 homeowners over the next six months, or about one-third of all the mortgages it owns, on adjusting loan rates, reducing principal or increasing the term of the loan to avoid foreclosure in the future.

A team of 600 salespeople will work with Citigroup customers and will focus on geographic areas hit hardest by the financial and housing crisis, including Arizona, California, Florida, Michigan, Ohio and Indiana.

According to the most recent data from the Mortgage Bankers Association, more than 4 million American homeowners with a mortgage were at least one payment behind on their loans at the end of June and 500,000 had started the foreclosure process.

Citigroup has helped about 370,000 homeowners avoid foreclosure since early last year.

The government is reportedly working on a plan to help around 3 million borrowers avoid foreclosure, but the details have not yet been announced.