Citibank Allowing Homeowners To Remain In Homes
CitiMortgage yielded a new program to aid homeowners by allowing them to stay in
their properties for an extra 6 months as long as they hand in their property deeds when the six months expire. The new program termed Foreclosure Alternatives Program is deemed to attract 1,000 home participants and is open to the states of Illinois, Michigan, Texas, Florida, New Jersey and Ohio. CitiMortgage may implement the program in all states.
During a foreclosure, the financial institution will recover the property while the ex-homeowner will have to abandon the premise. Citibank's Foreclosure Alternative Program combines the provisions of a Deed In Lieu of Foreclosure thus permitting borrowers to not experience a typical foreclosure. Its purpose is to provide relief to families by allowing them to reside for an extra 6 months as long as they return the deed to the financial institution.
A regular foreclosure will harshly impact a homeowner's credit score. CitiMortgage's program, an extension of the Deed In Lieu of Foreclosure will not harshly impact homeowners' credit scores even if they agreed to abandon their homes in six months.
The new program is an effort by lenders to curb the growing popularity of homeowners 'walking-away' from their homes or otherwise known as the act of 'strategic default'. According to Moody's Economy.com, more than 30% of U.S. homeowners are underwater or owe more than their homes are worth.
Real estate market forecasters point out that mortgage holders who owe twenty percent of more are likely encouraged to vacate their homes by simply walking away. Many of these folks feel that it is unrealistic for home values to return back to the high levels in the short term.
Sanjiv Das who is CEO of CitiMortgage says that preventing foreclosure is of good interest to both parties of borrower and bank. The intention of the program is to aid the borrower in moving on to the next phase of their lives. Homeowners will still need to pay their electric and gas bills. The bank is willing to set aside a minimum of one thousand dollars per borrower for transitioning expenses including other costs involving the hiring of professional relocation advisers. Other expenses such as HOA and escrow charges will be decided based on each borrower's ability to pay.
Part of the agreement will require the homeowners to maintain the property in its current condition and agree to meet twice a month with trained relocation counselors so as to prepare themselves for a smooth transition into the next chapter of their lives.
How To Qualify?
Foreclosure Alternatives Program was set up to assist homeowners who did not succeed in getting a loan modification or short-sale. To qualify for the program, borrower must initially be eligible for a permanent modification. If the borrower did not succeed in qualifying for a permanent modification, Citibank will decide if a short-sale will fix the problem. A short sale is when the financial institution nods to selling the home at a price lower than the mortgage amount owed. If the short-sale is not viable, the homeowner may then be turned to Citibank's Deed in Lieu program or alternatively known as the Foreclosure Alternatives Program.
To be eligible for this program: 1. Homeowners must possess first mortgages with a clear title owned by CitiMortgage. 2. Must be presently living and occupying the property. 3. Must be at least 90 days delinquent on your mortgage payments.
Citi's Foreclosure Alternative program was announced 3 months after Fannie Mae's November 2009 announcement of their 'Deed For Lease Initiative'.
Fannie Mae's 'Deed For Lease' program allows homeowners to return the property deed back to the lender and in exchange, allow the homeowner to rent the home for up to 12 months. Fannie Mae's recently announced program literally converts homeowners into renters after they have returned the property deed.
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Citibank Allowing Homeowners To Remain In Homes
By: Jeffrey Fisher
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