NEW YORK--(BUSINESS WIRE)--CitiMortgage today announced the launch of the Home Rental Program which will be managed by Carrington Capital Management, LLC and Carrington Mortgage Services LLC, a specialist in servicing distressed residential real estate assets. Developed by CitiMortgage and Carrington as a pilot program, the Home Rental Program is designed to provide an alternative to foreclosure and allow eligible borrowers to stay in their homes by entering into a deed-for-lease home agreement and establishing a lease.
Sanjiv Das, CEO of CitiMortgage, said, “CitiMortgage remains committed to finding solutions that can ease the burdens of distressed homeowners. The Home Rental Program offers eligible borrowers an option to remain in their homes while avoiding the disruption of foreclosure. As a financial institution, managing a program of this nature is not within our area of expertise, so we joined with Carrington, one of the best property management companies in the country, to help make this program work. In addition to helping families by keeping homes occupied, the program assists neighborhood revitalization and stabilization efforts, which are crucial to the nation's economic recovery.”
“We’re looking forward to working on this important initiative with CitiMortgage and our partner, Oaktree Capital Management," commented Bruce Rose, Founder and CEO of Carrington Holding Company, LLC. "Offering alternatives for borrowers looking to stay in their homes and simultaneously relieving their distress is core to the operating principles of our firm and will help substantially in the overall housing market recovery."
Under the program, the eligible borrower transfers ownership of the property to a vehicle established by Carrington Capital and its joint venture partner, Oaktree Capital Management, L.P., acting as investment manager for certain investment funds. Carrington will assume responsibility for servicing these loans and offer the program to qualified borrowers beginning in August. To implement the program, CitiMortgage has transferred the ownership of loans in its portfolio through the sale of $158 Million in mortgages to the Carrington/Oaktree partnership.
The program will be tested in six markets, most of which have been hard hit by the housing crisis, to evaluate its effectiveness: Arizona, California, Texas, Florida, Nevada and Georgia. Carrington will contact homeowners who meet the eligibility requirements. To be eligible, candidates must:
- Be unable or ineligible to receive an affordable loan modification, but have the resources to make monthly rent payments.
- Have a loan in the pilot portfolio serviced by Carrington
- Occupy the property
- Owe more than their home is worth
- Be delinquent for 120 days
Eligible candidates are not required to accept the deed-for-lease option. Candidates who agree to a deed-for-lease will establish a lease for the property at a manageable monthly payment. Carrington will work with borrowers to establish an optimal length for each lease. Lease payments will be determined by local market rates but are expected to be lower than the borrower’s current mortgage obligation.
Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.
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Carrington Holding Company is the parent company for the Carrington Family of Companies, which includes vertically integrated operating businesses that direct every aspect of the life cycle of single family assets. Its core capabilities include investment and fund management, residential mortgage special servicing and origination, property management and maintenance and real estate sales and settlement services.
With more than three decades of experience and guided by a consistent philosophy, Carrington has built the infrastructure necessary to maximize value during any market cycle. Its affiliate companies include Carrington Capital Management, LLC, Carrington Mortgage Services, LLC, Carrington Property Services, LLC, Atlantic & Pacific Real Estate, LLC, White Van Real Estate Services, L.P., Telsi Escrow Inc., and Telsi Real Estate Solutions, LLC. Carrington Mortgage Services, LLC is an equal housing opportunity lender. To learn more about Carrington Holding Company, visit our website at www.carringtonhc.com.
Oaktree is a leading global investment management firm focused on alternative markets, with an estimated $78.7 billion in assets under management as of June 30, 2012. The firm emphasizes an opportunistic, value-oriented and risk-controlled approach to investments in distressed debt, corporate debt (including high yield debt and senior loans), control investing, convertible securities, real estate and listed equities. Headquartered in Los Angeles, the firm has over 650 employees and offices in 13 cities worldwide. For additional information, please visit Oaktree’s website at http://www.oaktreecapital.com/.