CitiMortgage Unveils Program for Distressed Homeowners

GSIG LLC

Under a new program, distressed Florida homeowners whose loans were financed by CitiMortgage may be able to stay in their homes for a while and avoid the pain of foreclosure proceedings.

This deed-in-lieu program begins TODAY and will be tested in six states, including Florida. It allows those facing foreclosure to remain in their homes for six months, in exchange for signing over their property deeds to CitiMortgage at the end of the period.

According to a news release, “it is designed “to help homeowners make a smooth transition into the next chapter of their lives.”

Deed in lieu of foreclosure is a practice in which homeowners give away their property to the lender, who then sells it to retrieve a part or all of the loan balance owed.

The program comes with several requirements. Such as, the homeowner must hold the first mortgage with a clear title owned by CitiMortgage. Also, they must be at least 90 days delinquent. Finally, there can be no second mortgage.

Borrowers must maintain the property in its current condition and pay all utility costs. Other costs, such as homeowner association and escrow fees, are to be determined on a case-by-case basis.

CitiMortgage will provide a minimum of $1,000 in relocation costs to help borrowers.

So, what’s in it for CitiMortgage? According to Mark Rogers, Citigroups director of public affairs, it spares the lender the cost of going through a foreclosure, which is lengthy and expensive. The value of the home that is maintained does not diminish. “Once the owner moves, we get the property that’s in better condition, so we can immediately market it,” Rodgers said. “It’s much more likely to sell quickly in good condition than in bad condition.”

Scott Coloney, of the Foreclosure Response Team in Fort Lauderdale doesn’t think it’s going to solve the overwhelming problem plaguing the real estate market – the glut of foreclosures.
“The idea is to create transactions. To get the economy going, you need movement.”

CitiMortgage hopes to prevent homes from being added to the backlog by allowing homeowners to stay put for a while. “If we can get them out in a more measured way, we can hopefully avoid that,” Rodgers said.

RealtyTrac just reported that one in every 187 homes in Florida received a foreclosure notice in January.