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Underwater homeowners facing foreclosure may have a chance to stay in their homes. According to a press release issued Wednesday by CitiMortgage, the mortgage giant has partnered with Carrington Mortgage Services LLC to establish the Home Rental Program.
The pilot program will be tested in six markets, most of which have been hit hard by the housing crisis. The markets include Arizona, California, Texas, Florida, Nevada and Georgia. To start, the program will offer help up to 500 homeowners in need of help.
The program is designed to provide an alternative to foreclosure, allowing eligible buyer to stay in their homes as tenants with the bank acting as landlord. Under the deed-for-lease agreement, the rental rate would be based on local market rates.
“CitiMortgage remains committed to finding solutions that can ease the burdens of distressed homeowners,” Sanjiv Das, CEO of CitiMortgage, said in a press release. “In addition to helping families by keeping homes occupied, the program assists neighbourhood revitalization and stabilisation efforts, which are crucial to the nation’s economic recovery.”
To be eligible for the deed-for-lease program, homeowners must:
- Be unable or ineligible to receive an affordable loan modification, but have the resources to make monthly rental payments
- Have a loan in the pilot portfolio serviced by Carrington
- Occupy the property
- Owe more than their home is worth
- Be delinquent for 120 days