I was reading a blog in an investor portal where the author was suggesting that Citibank is considering a new approach to the current economic crises that has our housing market in a downward spiral.

Apparently the chatter I that Citibank will consider reducing the principal owed on individual homes in an effort to stop foreclosures.  Now, the author did not come up with any significant data to back this up...but it is an interesting concept that bears repeating and exploring.

My own take is that the current loan modification and short sale programs just are not working out very well.  I know of numerous locals who have not paid a mortgage payment in over a year...and still have not received a notice of default.  So what is up with that?

So, from what I gather, the program would be a simple reduction in the debt the homeowner owes Citibank...or any other lender that follows suit.  In exchange for not foreclosing, Citibank would then share in any equity, once the home is ultimately sold.

So everyone is pretty much a winner.  The homeowner gets to stay put, albeit a prisoner to the home as they can't really move on, until there is equity once again.  Neighborhoods are stabilized, Counties and Cites are once again collecting property taxes and Citibank is saving itself a lot of grief by foreclosing on thousands of families...and still in an equity position when it comes time to sell. 

Sounds like a winning solution for all involved.  Other than the homeowner not being able to move at will, and the fact that this could destroy my REO Listing business prematurely, I say it sounds like a decent solution...now if I only knew if this was real or not...

Until Next Time, Have a Blessed Day,

John Occhi, ePRO, REALTOR®
DRE Lic No: 01444168


ePro,John Occhi,www.johnocchi.com,realtor      Certified Probate Real Estate Specialist Logo Awarded to John OcchiFive Star Logo,Certification,REO,Five Star Institute     

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This blog and the contents written here is the intellectual property of John Occhi, Temecula - Murrieta, CA REALTOR® in the South West Riverside County region of the Inland Empire of Southern California.  The views and opinions expressed are just that - views and opinions of John Occhi and those who comment.  Please note that I am not an attorney or a tax professional and any time I discuss either topic, I suggest you consult with the proper professional for relevant assistance. 


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9 Comments on Citigroup Suggests Mortgage Debt Forgiveness

NOV
30
2009
873,612 Points Outside Blog Called Shot Master

Hi John,

Thank you for an informative and helpful article.

John Pusa
12:41am • #1
297,138 Points 19 Featured Posts Localism Sponsor Outside Blog

John,

You're welcom.

John
1:11am • #2
251,523 Points 7 Featured Posts Outside Blog Called Shot Master

John, This could be very interesting.  It could mean an end of most short sales and a shift in the market.  I'll be looking for further updates on this.
1:20am • #3
297,138 Points 19 Featured Posts Localism Sponsor Outside Blog

Dan,

It could men the end to a lot of business we have going on right now...REO's too...

Please keep me posted if you hear anything more concrete.

Thanks,

John
1:40am • #4
289,689 Points 6 Featured Posts Called Shot Master

Are you suggesting that Citibank is considering offering up new loans/refinances for homes NOT currently financed by Citi?  Did I read that right?
1:40am • #5

Prisoners? Why would you get rid of a FREE & CLEAR house? What are you talking about, in this recession, just rent the house or do a rent to own for 30 or 40 yrs while still keeping Citi Mortgage...Therefore making money, while you can buy another house with the rent payments received because of the thounsands of homes being sold for 10 to 30 cents on the dollar...LOL...Can you say extra income withouth working at a JOB...Entrepreneur mentality gets this country out of a recession faster than Obamas cabinet gets into your wallet...LOL...Let's take advantage of our own money given to the banks which they haven't been lending.

Just how my mind works...LOL

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Fabio Sekoff
10:52am • #6
297,138 Points 19 Featured Posts Localism Sponsor Outside Blog

Kate,

First let me emphasise that the resource is no one I know - it is just a blog I read on an Investment Portal...for all I know the author may have had mushrooms for breakfast...

It is NOT my understanding that Citibank would start cashing out other loans...only their own...but who knows in this economy what makes sence any more.

John
11:07am • #7
297,138 Points 19 Featured Posts Localism Sponsor Outside Blog

Fabio,

Well I like how your mind works...definately outside the box - thanks for the comments

John
11:07am • #8

Thanks for the article, now all they need to do is to put this into action.
3:58pm • #9


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John Occhi, ePRO, Temecula - Murrieta CA Real Estate, 951-443-6259

Murrieta, CA

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