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Permalink Reply by Mike Linkenauger on February 13, 2010 at 6:37pm

Without reading what you sent, I heard they are offering folks six months rent free after a deed in liue... is that correct?? Definately not good for us! Sounds good for a homeowner, but my experience is that a pretty high percentage of the homes have a second lein of some sorts. I should probably read it first....

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Permalink Reply by Mike Linkenauger on February 13, 2010 at 6:39pm

OK, so that is what I heard. WHY would they do that?? Shouldn't they just strealine the short sale process and cut their losses??? That would make the most sence to me!

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Permalink Reply by Steele V. Propp on February 13, 2010 at 9:35pm

I was thinking the same thing. First, most borrowers have more than one lien against a property these days. Second, a deed in lieu is still basically a foreclosure. So I think some borrowers will be fooled on that score.

Here in Minnesota we have a six month redemption so we are used to the long wait. But at least we can still work on a short sale and many times cut down on the bank's holding time.

If a deed in lieu is agreed to in advance then there is no way to move up the process and get this off the books for the bank. What might make a little more sense would be for the bank to be allowed to start marketing the property during the last half of the six months. They could probably have a buyer ready to move in right after the old borrower moves out.

It's like this really isn't thought out.

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Permalink Reply by Angela Alfe on February 17, 2010 at 9:51am

Well, it would save them a lot of money in fees (attorney fees, filing costs, and eviction costs) on a property that is not short selling for whatever reason (market/condition/owner refusals/etc). And, I can see on the one hand, why they would offer this. Although, it doesn't make sense in the long run. It seems that banks are short term visionaries and not long term planners...which is wholly disturbing in and of itself.

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Permalink Reply by Theresa Young-Rock on February 17, 2010 at 3:06pm

I think this is just going to create more shadow inventory. Not sure I like this at all, it does sound good for the homeowner. "Walk away" free and clear, 6 months mortgage free, and 1K to move.

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Permalink Reply by Hericson Torres on February 18, 2010 at 4:05pm

REO business will be booming! The idea seems to be a bad one. More losses for the banks, more bank owned homes on the market, more depreciation. Unless they are trying to just avoid paying secondary liens, etc which are settled for little to nothing anyway I don't see any other positive to the plan.

Hopefully, they start working short sales more aggressively. Stream-line the process, that would make it the best option.

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Permalink Reply by Steele V. Propp on February 18, 2010 at 4:07pm

They are testing it out in some of their worst states. Maybe they will learn quickly before spreading this around the country.

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Permalink Reply by Loree Nichols on February 28, 2010 at 11:12pm

So how do we become REO agents for Citibank? :-)

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