Citi to let distressed homeowners stay for 6 mos. reads the headline.
This is just a delayed foreclosure without all the paperwork. After 6 months the family is still put out on the street.
WASHINGTON (AP) -- Citigroup Inc. plans to let homeowners on the verge of foreclosure stay in their homes for six months - if they turn over the deed to their property.Then too, Citi forestalls for six months the point they have to account for the loss of these "loans" they still have on the books.
Citi said Thursday it is launching the pilot program, dubbed "Foreclosure Alternatives," this week in Texas, Florida, Illinois, Michigan, New Jersey and Ohio. Initially, about 1,000 homeowners are expected to participate. Citi may expand the program nationwide.
In a normal foreclosure, a lender assumes legal control of the property and evicts the homeowner. But Citi's program, like other "deed in lieu of foreclosure" efforts, allows the homeowner to avoid a completed foreclosure. While the owner must still leave the home after six months, the program results in a less severe hit to the borrower's credit score.
Also, many states have lengthened the time it takes to complete a foreclosure, making the process more time-consuming and expensive for the lending industry.
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