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Citi announces foreclosure pilot program to help distressed borrowers

Feb 11, 2010

CitiMortgage has announced the Citi Foreclosure Alternatives Program, a new pilot initiative that will allow distressed CitiMortgage borrowers to avoid foreclosure and remain in their homes for six months by agreeing to sign over their property deeds to CitiMortgage at the end of that period. In addition, Citi will provide relocation assistance to aid the borrowers’ transition to another residence at the end of the program. This expanded deed-in-lieu-of-foreclosure program, the latest in the company’s series of initiatives to help distressed borrowers, is being piloted in Texas, Florida, Illinois, Michigan, New Jersey and Ohio, beginning Feb. 12. “By helping avoid the foreclosure process, which can be very stressful and distracting, and keeping people in their homes long enough to make an orderly transition to the next stage of their lives, we are also supporting neighborhood revitalization and stabilization efforts, which are crucial to the nation’s economic recovery.” “At CitiMortgage, we’re committed to finding every solution possible to help families facing foreclosure. However, the reality is that not every homeowner has the financial ability to remain in their home,” said Sanjiv Das, chief executive officer of CitiMortgage. “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.” In exchange for the deed on their property, CitiMortgage will allow borrowers to stay in their homes for a period of up to six months. At the end of the six months, the borrower will turn over the property deed to CitiMortgage, and CitiMortgage will provide a minimum of $1,000 in relocation assistance to the borrowers. Citi will also provide relocation counseling by trained professionals and will cover certain monthly property expenses if Citi determines that the borrower can no longer afford them. Payment of utilities costs will be the responsibility of the borrower. Other costs incurred by the borrower, such as homeowner’s association and escrow fees, will be determined on a case-by-case basis considering the borrower’s specific financial circumstances. As part of the agreement, borrowers must maintain the property in its current condition and agree to bi-monthly meetings during which trained relocation professionals will help the borrower prepare for the next chapter of their lives. Before a borrower enters the Foreclosure Alternatives Program, they must first be evaluated for a permanent mortgage modification. For those who do not qualify for a modification or another solution, CitiMortgage will explore the possibility of a short sale in which the company might accept a buyer’s offer for less than the outstanding amount of the mortgage. If a short sale is not feasible, then the borrower may be considered for the deed-in-lieu program. In addition, in order to be eligible, homeowners must hold first mortgages with a clear title owned by CitiMortgage, occupy the property, and be at least 90 days delinquent on their mortgage payments. As it evaluates the progress of the pilot program, CitiMortgage will assess whether or not to expand the program to other parts of the United States. The initial pilot is expected to help as many as 1,000 families. “We hope others in our industry will join us in helping distressed borrowers across the country,” continued Das. “By helping avoid the foreclosure process, which can be very stressful and distracting, and keeping people in their homes long enough to make an orderly transition to the next stage of their lives, we are also supporting neighborhood revitalization and stabilization efforts, which are crucial to the nation’s economic recovery.” While CitiMortgage has done deeds-in-lieu and short sales in the past, the company is increasingly looking to them as alternatives to foreclosures. For more information, visit www.citimortgage.com.
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Feb 11, 2010
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