Citi creates new foreclosure avoidance program

NEW YORK — Citi Mortgage has created a foreclosure alternatives program to help distressed borrowers avoid foreclosure by deeding their property to the bank. The program allows homeowners to remain in their homes for six months, and Citi will provide a minimum of $1,000 to help them move at the end of that period. This expanded deed-in-lieu-of-foreclosure program is being piloted in Florida, Texas, Illinois, Michigan, New Jersey and Ohio, beginning February 12.

 “The goal of the program is to help homeowners make a smooth transition into the next chapter of their lives,” Citi Mortgage CEO Sanjiv Das said. “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.”

Citi will also provide relocation counseling and will cover certain monthly property expenses if Citi determines that the borrower can no longer afford them. Payment of utilities 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. As part of the agreement, borrowers must maintain the property in its current condition and agree to bi-monthly meetings during which trained relocation.

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, Citi Mortgage will explore the possibility of a short sale or to buy the home 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, Citi Mortgage 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.

For more information on the program and other Citi foreclosure prevention efforts, please go to the Citi Mortgage web site.