What if you could live in your house for 6 months and get $1,000.00 to move instead of a foreclosure? Sounds too good to be true? Not so for certain homeowners living in Florida, Illinois, Michigan, New Jersey, Ohio, and Texas.
In February 2010, CitiMortgage, a division of Citigroup, offered a pilot project to distressed home owners who cannot afford their mortgages. If borrowers were headed for foreclosure, CitiMortgage offers a program where they will turn in the house voluntarily via a “deed-in-lieu.” A deed-in-lieu means the bank will take the house instead of making the borrower’s pay the full mortgage. While deed-in-lieu is not a new concept, CitiMortgage takes it further because borrowers can continue to live in the house for up to six months before it takes the house. It gets better. CitiMortgage will give borrowers at least $1,000.00 to relocate.
That's right, borrowers get to live in your house for 6 months and CitiMortgage will give $1,000.00 to relocate. All borrowers have to do is keep the home in good condition and meet with trained relocation professionals. And move out at the agreed upon time.
CitiMortgage’s pilot program is an example of how bad the foreclosure process really is and how alternatives can be win-win for everybody. By agreeing to a deed-in-lieu, CitiMortgage avoids an actual foreclosure because it receives the property without a court battle. Giving borrowers six months in the house makes sense because the foreclosure process would have taken about that long anyway. CitiMortgage relocation payment makes sense because it would have spent that much to kick borrowers out. The best part for CitiMortgage is that it will get the property in good condition and on a date it can plan for.
Before you start calling your mortgage lender, there are some strings. First, you must have a first mortgage with CitiMortgage without a second mortgage. Next, you must actually live in the house. Third, you must be delinquent in your payments. Fourth, CitiMortgage will try to qualify you for a loan modification first before you qualify. Fifth, CitiMortgage may try to sell the property in a short sale instead. Don’t be discouraged, the strings are exactly the steps most borrowers try before they let a house go. Realistically, if you were considering foreclosure, then you probably already tried for a loan modification and a short sale.
What if You Don't Qualify?
If you have a second mortgage or have already moved out, then you do not qualify. In that case, you still have your regular options such as bankruptcy. Bankruptcy is still a real option because it allows the surrender of property just like a deed-in-lieu. Bankruptcy also has the option of keeping the property by giving you a repayment plan for missed payments. Finally, bankruptcy is available all borrowers, not just CitiMortgage holders.
If you need help, contact the Law Office of Eddy Hsu for a consultation on your situation.
From the author: Alternatives to Foreclosures
