I saw this article and thought it might apply here in New Mexico to keep some distressed Albuquerque Homeowners in their homes.
Source: The Wall Street Journal by Alan Zibel
“Citigroup is starting a program to allow 500 homeowners in trouble with their mortgages to rent back their homes if they sign over the deed, a step some lenders are taking to help people avoid foreclosure.
The bank said Wednesday that it has sold $158 million in loans it holds on its books to a joint venture of Santa Ana, Calif.-based Carrington Capital Management LLC, which is investing in distressed real estate and mortgages, and Los Angeles-based investor Oaktree Capital Group.
The homeowners, who live in Arizona, California, Texas, Florida, Nevada and Georgia, will be offered the chance to rent the homes at market rates if they can no longer afford their mortgage payments, even with a modified loan. The pilot effort could be expanded if it is successful.
Under the program, borrowers would agree to a “deed-in-lieu” of foreclosure, in which they sign over ownership of the property to the lender. This is less costly to the bank and does less damage to a borrower’s credit than a foreclosure.
Homeowners are not required to accept the deed-for-lease program. The leases are expected to be signed at market rates but are likely to be lower than the borrower’s current mortgage payments.
Citi picked Carrington as a partner because the bank did not have the expertise to manage the program on its own, Sanjiv Das, chief executive of Citi’s mortgage unit, said in a statement.
“In addition to helping families by keeping homes occupied, the program assists neighborhood revitalization and stabilization efforts,” Mr. Das said.”