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CitiMortgage, the servicing side of CitiGroup’s lending sector is promoting some new alternatives for homeowners who do not qualify for loan modifications. These alternatives work in conjunction with CitiMortgage’s new “Road to Recovery Events” program which aims to help homeowners benefit from government and private loan modification programs. According to recent figures, 65 percent of applicants at these events are successful. What happens to the 45 percent that are not granted a mortgage modification? CitiMortgage is offering a special foreclosure alternative program across six states.
What is a foreclosure alternative?
There are two main types of foreclosure alternatives: short sales and deeds-in-lieu of foreclosure. A short sales occurs when the lender allows the borrower to sell the property undergoing foreclosure at a price below the mortgage balance to avoid foreclosure. A deed-in-lieu of foreclosure occurs when borrowers agree to return their deed, and therefore their legal claim to the property, in exchange of avoiding foreclosure. These alternatives can be beneficial to borrowers as long as the lender agrees not to attempt to collect any difference between the mortgage’s balance and the sale price.
What is New?
Up to now, nothing new. Short sales and deeds-in-lieu of foreclosure have been around for a while. However, CitiGroup through its branch CitiMortgage is offering some new additions to short sales and deeds-in-lieu of foreclosures.
If you have no chance of arranging a loan modification or refinance, CitiGroup will offer you up to six months of free month if they agree to exchange the deed for six-months of additional stay in the house. As far as now, there is not completion date for this date, which means it should be open for all homeowners who qualify for the program. This six-month break will allow you to start saving for the new deposit or move and avoid some of the stress of moving after a foreclosure.
Moving home is a huge expense. If you have just gone through a foreclosure, the cost of moving may simply be too much to deal with. CitiGroup, through CitiMortgage, offers borrowers a helping hand here by offering homeowners who agree to a foreclosure alternative a minimum of $1,000 towards moving costs. This will help with a new deposit if you decide to rent or as aid towards the new appliances and furniture you may need for your next house.
The idea is to reduce the cost and damage of foreclosures to clients by providing tenants with an incentive to be tidy and leave the property on good terms. This does not only help borrowers save money but banks and lenders also.
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