Yeah!!! Citi announced that it will let borrowers stay in their homes for up to six months plus snag $1,000 to help defray costs for relocation, if they agree to a deed-in-lieu of foreclosure. (i.e., so you will stop suing them, trying to get a loan mod, short sale or file bankruptcy not to mention making them produce the Note to your home to see if it is Citi that you really owe, they are going to try to bribe you.)
What’s are some of the catches?
- Borrowers lose their home. (Hence the term Deed in Lieu of Foreclosure.)
- This is a PILOT program for up to 1,000 borrowers; spread over six states so there is no guarantee you will get in and/or it will continue.
- Borrowers must have clear title. (READ: No other liens such as: 2nd mortgage, HOA, tax, IRS, water systems, child support, credit card judgments, etc.)
- Borrowers must have a Citi loan for the first mortgage. (We assume this means Citi is servicing the loan OR maybe they own the loan. Who knows?)
- Borrowers must continue to pay utilities & insurance.
- Homeowner’s association fees will be determined on a case-by-case basis upon Citi’s determination if the homeowner can afford them.
- Borrowers must maintain the property in its current condition. (I wonder how they will know if your grass is always the same height.)
- Borrowers must agree to bi-monthly meetings with relocation specialists. (You foot the bill for gas to drive across town on their schedule.)
- Borrowers must be at least 90 days delinquent. (Here’s to hoping they don’t foreclose before your time is up.)
- Borrowers must occupy the property in question.
- Borrowers will only be considered for the program after being evaluated for a permanent loan modification and being denied.
- Borrowers must have been considered for a short sale and denied.
Excerpts from the leader of this fun house…
“At CitiMortgage, we’re committed to finding every solution possible to help families facing foreclosure. (Except principal reductions which typically require major litigation.) However, the reality is that not every homeowner has the financial ability to remain in their home,” said Sanjiv Das, CEO of CitiMortgage, in a release.
“The goal of the program is to help homeowners make a smooth transition into the next chapter of their lives. The Foreclosure Alternatives Program is another tool in our ongoing efforts to find creative, innovative ways to help our customers across a variety of difficult financial situations.”
Late last year, mortgage financier Fannie Mae unveiled a foreclosure prevention tool called the “Deed for Lease Program,” which allowed borrowers to lease their homes after agreeing to a deed-in-lieu of foreclosure. (But of course in many cases they instead have their lawyers send nasty letters to the renters advising them that they have been foreclosed and they need to vacate.)
I’m curious, will Citi put into writing that they will indemnify the Borrower if some other party comes forward claiming an interest in the Note.
- The Bank Slayer
