Wednesday, March 3, 2010

CitiMortgage Tests New Foreclosure Alternative

Major lender CitiMortgage is testing a new way to take back properties that skirts foreclosure and promises to avoid the problems associated with eviction.

In this transaction, known as deed in lieu of foreclosure, the home owner turns over the deed to the bank in exchange for the lender’s promise not to foreclose. Typically, the borrower can remain in the property for a short period of time until they are able to move, but they must leave the home in good condition.

To qualify, Citi borrowers must be 90 days late on their payments and they must have only one lien on the property.

Citi is only expecting about 1,000 borrowers to qualify for the program because most people facing foreclosure have second mortgages.

Source: The New York Times, Bob Tedeschi (02/28/2010)

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