CitiMortgage, a division of Citigroup, is testing out a new pilot program that will apparently let delinquent borrowers stay in their homes for up to six months without making a single payment.
And believe it or not, Citi isn’t doing this out of kindness; it wants to avoid people trashing their homes on the way out.WSJ: Mortgage lenders are trying to arrange smoother departures for distressed homeowners who can’t be saved by loan modifications — and discourage them from trashing the homes on their way out.
The CitiMortgage pilot program provides incentives for more borrowers to use a procedure known as a “deed in lieu of foreclosure,” in which the borrower voluntarily transfers ownership of the home to the lender, which then cancels the mortgage debt. Aside from letting such people stay in the homes for six months, CitiMortgage says it will give them at least $1,000 to cover relocation costs, an incentive sometimes dubbed “cash for keys.”
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