Citigroup to Ease Foreclosure Process
Citigroup announced Thursday that it will let delinquent home owners who don’t qualify for any federal relief program stay in their homes for six months as long as they turn over the keys and leave the property in good condition when the grace period expires.
The bank estimates that more than 20,000 borrowers in hard-hit states like Michigan, Ohio, Florida, Illinois, Texas, and New Jersey could be eligible.
Citigroup is hoping its plan will prevent borrowers from damaging their homes before they depart, which will save the bank significant repair dollars. The program also allows the company to bypass the slow-moving foreclosure process and gives the bank more control over when it puts properties on the market.
Source: The Washington Post, Renae Merle (02/11/2010)
Wow! I am amazed that banks continue to make their own rules. No need for NAR to keep them out of real estate, they are controlling it now....
Comments
Is Citigroup one of the companies signed up for HAMP??? Where did this process come from if it is not a DIL and DIL are after the homeowner tries short sale with the HAMP program.
In my head I said, but that could not happen again not in this century? Till I saw it with my own eyes, I got the chills, because I remember In two minutes of seeing the scene, of that detailed conversation that took 2 hrs back in 2006. My head kept saying, They are baaaack , looking at the scene. Or is it that they never went away. I am not a scenic, but I am an skeptic. I guess that Old habits are hard to break, for some. The only way, well not the only, but the best way is thru Short sales, in most cases because the property still is in HABITABLE condition. And we all know what that means.
To think this through....Citi will end up far ahead of the game on this, here’s why, If you take the foreclosure cost of $8,000 to $12,000 that they won't be spending and the $3,000 for the CFK after foreclosure that they won't be spending, just the carrying cost remain for the 6 month period. Now if the property is left in good condition and appliances intact and maintained up to the point of the agreement they would save a ton of replacement, preservation and possible vandalism money as well, also if the property is maintained there would be no city fines or liens to deal with and less of a chance of utility issues.
You are right Ramez, there does need to be a check and balance to insure the occupants are not trashing the place any way, Who Knows? Agents might get these pre-listings and have to do bi-weekly checks., but any way you look at it, if they get the DIL on the front end they have still saved the foreclosure and CFK money.
I don’t know if I would look at this as the banks controlling the real estate market, it seems to me that they are trying to protect their assets. We need all the banks to be profitable again quickly as part of the recovery, this simply might be a way of saving a few bucks for them and it seems it would help the owner/occupants as well. I wonder if Citi will still go after the difference owed, or if the DIL will clean that up for the homeowner.
Thanks for the article Cynthia….good stuff!
I wonder how they would enforce such a thing.
Might as well rent them the property back on a 1 year lease.. I guess we'll be seeing more of this in the future..
I think loan mods aren't effectively working and foreclosure is just eminent. they just want to control the wave i guess.