Help Arrives for Distressed Homeowners
Help could soon arrive for homeowners who don’t have the financial resources to make their mortgage loan payments. Mortgage rates and home prices could become a distant memory, while releasing owners from any liability.
One of the nation’s largest mortgage servicer providers, CitiMortgage, just launched a new program aimed at helping homeowners facing home foreclosure.
Instead of allowing borrowers to fall further behind on their mortgage loans each month – ending in foreclosure, it will allow owners to stay in their homes for up to six months if they agree to hand over the deed of their home.
The program targets borrowers who are already seriously delinquent, having missed at least three monthly mortgage loan payments. Typically those homes are most at risk of falling into foreclosure in the housing market. 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.
CitiMortgage will pay borrowers a minimum of 1,000 dollars to help with relocation expenses. It will also provide relocation counseling, and may even cover some monthly property expenses while the borrowers remain in their homes. It will also forgive any difference between the value of the home at time of repossession, and what the borrower owes. Once the deed goes back to the lender, the borrowers walk away free and clear.
In return, borrowers must agree to keep the homes in good condition and to meet with trained relocation professionals every couple of months to facilitate their final moves. It says the program is ideally suited for borrowers considering walking away from their mortgage.
How to Qualify for the Program:
* First mortgage must be with CitiMortgage.
* Homeowners must be living in the home.
* Must be delinquent on mortgage payments by at least 90 days.
* No second mortgage.
The pilot program is starting in six states: Texas, Florida, Illinois, Michigan, New Jersey and Ohio. If it works in those states, CitiMortgage says it will open the program to the rest of the country.
Stay tuned, we’ll keep you informed on how this test program works out, and if it is to be expanded nationwide.