CitiMortgage is launching a home rental program that sounds a lot like a lease-to-own.
Citi’s goal is to allow owners to stay in their homes rather than being forced out through foreclosure.
To qualify, an owner must:
- still live in the property
- owe more than their home is worth
- be delinquent at least 120 days
- be unable or ineligible to receive an affordable loan modification while still having the resources to make monthly rent payments
- have a loan in the pilot portfolio serviced by Carrington Mortgage Services
A lease is then established for the property that the owner can, hopefully, better afford. The belief is that, under the new program, monthly payments will be less than what the owner was previously paying. Apparently, the length of the leases will vary.
Ownership of the property will be transferred to a vehicle established by Carrington Capital and its joint venture partner, Oaktree Capital Management, L.P. This “vehicle” was not described but it sounds as if the deed to the property will be held by a third party until the homeowner is either able to earn it back or, eventually, looses it through foreclosure.
This program, just like many others, will be first tested in six of the hardest-hit markets: Arizona, California, Texas, Florida, Nevada, and Georgia.