Citi is your friend...yeah, right!

CitiMortgage, the servicing arm of Citigroup, has introduced a new Foreclosure Alternatives Program that allows distressed borrowers to stay in their homes an additional six months in exchange for the deed. The program began on Feb. 12, 2010, with no end date set yet. The program was launched in Florida as well as several other states, and Citi expects 1,000 families to participate in the program.

Citi states they are allocating a minimum $1,000 (they did not say what the maximum was) to borrowers to assist with relocation. As part of the agreement, the borrower must maintain the property and attend bi-monthly meetings with relocation professionals (what is a Citi relocation professional?).

Citi will evaluate the borrower for a permanent mortgage modification or a short sale before entering the borrower into the Foreclosure Alternatives Program. (We think a short sale is better in 99% of all cases than a deed-in-lieu).

In order to enter the program, the borrower must hold first mortgages with a clear title owned by CitiMortgage, occupy the property and be at least 90 days delinquent on the mortgage. (It doesn't appear applicable to anyone with any 2nd mortgages or home equity loans on their property).

In my opinion, this is just a "deed-in-lieu" program with a small backend incentive. You will still, most likely, have this transaction reported on your credit report as a foreclosure and more importantly, there has been no mention of what happens to the deficiency amount once the bank sells the home for less than was owed on the mortgage...ultra, ultra important! Read my other posts regarding deficiencies to see why I say this!