Chicago Foreclosure Lawyer Blog

As the person who often deletes spam comments on this blog, I have been discovering that many of them are posted by other firms that engage in bankruptcy practice. Our firm also handles bankruptcy cases, but generally separately from our foreclosure defense practice.

Here is the obligatory disclaimer: We are a debt relief agency. We assist people with filing for relief under the Bankruptcy Code.

My own concerns about the ethical implications of comments that do not provide this disclaimer aside, I feel that it is important to give it before the jump. After the jump, I will talk about bankruptcy vs. loss mitigation strategies and when they are most effectively used.

Continue reading "Bankruptcy vs. Loss Mitigation" »

Full disclosure: The tagline for this post is dripping with sarcasm. Hopefully, the scare quotes make it pretty obvious.

In response to the dramatic increase in foreclosure filings in the last year, Citigroup is rolling out a new program to help Citi customers whose mortgages are distressed. As reported by Chicago's own WGN TV, the new program will stop immediate foreclosure proceedings and let home owners stay in their homes an additional six months.

Oh, and you have to give your home back to the bank, which they will first try to short sell.

Citi is also saying it will provide, "relocation assistance," but what does that mean? It could be movers and help finding apartments. It could be some boxes and packing tape.

Here's what bothers me -- this isn't anything new. Citi is simply indicating that it is willing to enter into Deeds in Lieu of Foreclosure or Consent Foreclosures. Even with standard deeds in lieu or consents, it is possible to set a move-out date a few months into the future. In some cases, you can choose your month (within reason).

While it is nice to see Citi apparently loosening up its standards for deeds in lieu and consent foreclosures, it seems odd that it is being spun as a new program that is being launched. The industry has been doing this stuff for years.

A Deed In Lieu of Foreclosure is a voluntary transfer of the property to the Lender in full satisfaction of the amount owed. By accepting the Deed In Lieu of Foreclosure, the Bank, in most instances, releases the Borrower/Homeowner from personal liability on the loan also known as a deficiency. Commonly, Banks are not as likely to accept a Deed In Lieu of Foreclosure if there are other liens on the property. In our practice, we have been able to secure Deeds In Lieu of Foreclosure by settling with the Secondary Lender and other lien holders, effectively clearing title for the Lender to facilitate the transfer. It is an intricate process and requires a full review of your file to come to a conclusion if this is even a good option for you.