Citi Mortgage Launches Deed-in-Lieu Program
CitiMortgage, one of the largest mortgage servicers in the country, has announced the launch of a pilot program that is intended to offer an alternative for some homeowners heading for foreclosure. Instead of borrowers falling further and further behind on their mortgages, leading to an eventual foreclosure sale, they can stay in their homes for up to six months, if they agree to then hand over the deed to the lender.
The program – the first of its kind among large servicers - targets homeowners who have already received a notice of default/sale and will likely end up losing their homes. By giving the house back to the lender, in a transaction called a deed-in-lieu of foreclosure, the lender saves considerable expenses, especially on legal fees. In return, CitiMortgage, will grant a number of incentives to participants such as a $1,000 contribution to moving costs, financial aid for monthly costs as well as relocation counseling.
To be eligible, homeowners must meet all of the following requirements:
- First mortgages with CitiMortgage, no second mortgage,
- Home must be occupied as primary residence
- Seriously delinquent on mortgage payments, at least 90 days late
The pilot program begins Friday and will be confined to six states: Texas, Florida, Illinois, Michigan, New Jersey and Ohio. If it works in those states, CitiMortgage will open the program up to the rest of the country.
