Short Sale And Deed In Lieu Of Foreclosure Programs From Citigroup–HAMP Update From December Report

Citigroup homeowners who are in financial distress and unable to qualify for a foreclosure prevention program have had options to either short sell their home or participate in a deed in lieu of foreclosure plan.  Homeowners across the nation have faced hardships which are the direct result of unemployment, negative equity, or a combination of both.  Yet, in some cases these homeowners are not in a situation to meet the guidelines for a foreclosure prevention program and, as a result, turn to alternatives that can help them avoid foreclosure.

Yet, there have been reports that state short sales and deed in lieu of foreclosure plans from many servicers, despite still being available, are slowing.  The December 2010 Making Home Affordable report stated that Citigroup had made 2,033 short sales or deed in lieu plans for homeowners whose modification was cancelled, which was a drop from the previous month’s report that stated Citigroup had made 2,473 foreclosure alternative programs as of the report’s release.  Also, for homeowners who were not given a trial modification, Citigroup had made 3,370 short sale or trial modifications, which is data tracked through the month of November, but the previous month only showed that Citigroup had made 3,664 alternative plans available to the same category of homeowners.

While some attribute this drop, which is not solely confined to Citigroup, to the fact some of these old loans may simply have been removed from the books or a result from foreclosure moratoriums, there are no large jumps in the numbers of these foreclosure alternative plans that were seen in the latter part of 2010.  Yet, there are some analysts who are hopeful about short sales or deed in lieu of foreclosure plans in 2011, but sadly more homeowners may simply qualify for these foreclosure alternatives simply as a result from prolonged financial hardship, unemployment, or continued drops in their equity.

However, before homeowners are given the chance to short sell their home or participate in a deed in lieu of foreclosure program, they will have to attempt to qualify for a foreclosure prevention plan like a home loan modification.  While there are some critics of the modification program who feel the lackluster performance should result in the program’s termination, homeowner’s are still able to use these modifications to simply prevent the loss of their home rather than sell at a loss or surrender their deed.