Get assistance from a deed in lieu of foreclosure from Citi.
This is an option that will allow borrowers to stay in their homes for up to six months, provided that they turn over the deed to the property to Citi after that time. A deed in lieu of foreclosure is a transaction in which a homeowner will relinquish the property. They will need to turn over the deed to the home to Citi in exchange for the banks promise not to foreclose on the property.
This differs from a straight foreclosure in which a bank will evict the homeowner and take legal control of the property. In the deeds-in-lieu program being offered by Citi, the homeowner will be allowed to remain in the home for a short period of time after the agreement in reached with the bank.
CitiMortgage is currently testing the new program in several states, and it should be rolled out nationwide soon. This will provide more borrowers with the opportunity to consider this strategy in the coming months. It was initially rolled out in Michigan, New Jersey, Texas, Florida, Ohio, and Illinois. Call 1-800-248-4638.
Details on the Citi Deed in Lieu Program
While it is offered in several states, the intent is to allow all homeowners to take advantage of this program. Citi has agreed to give qualified borrowers up to six months to live in their homes before it takes over the property. In addition to this extra time, they will offer these homeowners $1,000 in cash that can be used for relocation assistance, provided the home is kept in good condition. So people can use this cash to pay for moving costs, first months rent on a new home, or other expenses or bills. This is a new option, and previously the bank had no formal process in place for for serving those borrowers who failed to qualify for Citi’s other foreclosure-avoidance programs like a loan modification or forbearance. To qualify for the new deed in lieu program, Citi’s borrowers need to be at least 90 days late on their monthly mortgage payment and they also can’t have a second mortgage or lien on the home
Homeowners in Citi’s program must still pay utility bills that are incurred over this timeframe. However, in addition to the $1,000 in relocation costs, Citi will also consider helping with other expenses and bills the borrower may incur. It also will offer relocation counseling and services.
This new policy from Citi is similar to the one that was announced last fall by Fannie Mae, which is the government-controlled mortgage company. What Fannie is doing is they are allowing homeowners to return the deed to their properties, then they can rent them back at market rates, so the family still has a place to live.
While the program is evolving, currently it is estimated that roughly 20,000 Citi mortgage customers in the states will be eligible for the deed-in-lieu agreement. Thousands are expected to take advantage of the program.
In addition, the homeowner will be released from any legal obligations. As is often the case with deed-in-lieu settlements offered by any lender, Citi will release the borrower from all legal obligations to repay the loan.
This option benefits all parties. A deed-in-lieu is always better for the bank and lender than a foreclosure or a short sale because it reduces the banks legal costs and the risk of the property being damaged or vandalized. Also, it is better for the homeowners as well because it is less damaging to their credit score.
The new policy from Citi was created to address what many lenders see as a growing phenomenon. That is that many borrowers who are choosing to default on their mortgages. The reason this is occurring is that nearly one in three homeowners owe more on their mortgages than their homes are worth. So the deed-in-lieu program being offered by Citi will help both the bank and homeowner address this issue.
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