Citigroup to Ease Foreclosure Process

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....

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  • Does sound like DIL. The catch 22 here is (or should I say another catch 22) most properties that are "underwater" already have damages to them. Homeowners that are distressed do not have the money to maintain their home, so repairs are not a priority that they can take care of. Also, in 6 months alot can happen... including the homeowner figuring out they can probably get another couple of months from this "delay system"... and it keeps going and going!

    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.
  • I had the experience of a home owner getting cleaned out by a securing team that decided the homeowner needed to be liberated of her possessions. I happened to receive a phone call and saved a few of her belongings (mind you, the house is still not in foreclosure), and she has a lawsuit against the bank and the perpetrator is still running around loose and 'cleaning' up houses!
  • Banks could still be making their own rules, but they are still naïve as how those houses get damaged, dismantled, vandalized, ruined or however you would want to call it. All I know for a fact is that a great percentage of this properties do not get damaged by the owners , nor even by breakings or vandalism , But by whoever gets there first, Older REO agents (if you been in the REO business. over 10 years ) know what I mean. Let’s say this was a crime , who is/was the first to arrive, to assess the condition of the house, I know it should be the agent , but some of them sent their CREW, whoever they may be, locksmith , clean out crew. This was a confession (back in 2006) from a member of one of the largest clean out crews & property management co. in the north east back on the last S&L fiasco of the 80&90’.all of a sudden they found a new illegal income stream.
    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.
  • Very interesting, it does sound like a DIL SraM, it would almost have to be....with conditions much like a CFK with no pay out....or the payout being the time allowed to stay in the property. I would sure like to see the agreement for this. I doubt the bank would spend the money or the time to foreclose after this so more than likely do a DIL on the front end and an agreement on property condition.

    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!
  • Nice program. But in order to enforce it you'd have to check on the property regulalry. Homeowner can accept, stay 6 months only for them to find out that they have damaged it, by then it's too late and you're back to square 0.
    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.
  • This sounds like something like a deed-in-lieu, doesn't it? What about the homeowners who abandon the house and leave it vacant for a longgg time?
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