For many homeowners, there are many who have never been late on their mortgage payments. With the tough unemployment picture deteriorating in the United States and with so many home values slashed and underwater with loss of equity, it is commonplace for many homeowners to find themselves strapped for the first time.

Citi launched a new program termed Foreclosure Alternatives Program which allows homeowners to remain in their homes for an additional 6 months provided if they return the deed of their property at the end of the period. The pilot program initially expects 1,000 homeowners to participate and is available in Texas, Florida, Illinois, Michigan, New Jersey and Ohio. Citi may expand the program nationally.

As discouraging it is to lose your place to foreclosure, borrowers may still be liable for the deficiency amount. It’s the difference of what’s owed on the house loan and what the bank could sell for at an auction. “Deficiency judgments” can come after ex-borrowers at any unexpected time-frame after they have lost their house.

As congressmen establish new laws to prevent mortgage fraud, there seems to be a new sort of behind the scenes mortgage fraud performed by agents from big banks. On Jan 15th 2010, CNBC real estate journalist, Diana Olick wrote a provoking story regarding short-sales and mortgage fraud conducted by agents representing big banks.