Organizers and participating servicers are tweaking a program that would allow Detroit homeowners stay in the property after foreclosure for a monthly fee. A pilot for the Retaining Occupancy on Foreclosure, or ROOF, program was launched in 2009, but it underwhelmed organizers. It was created by the Detroit Office of Foreclosure Prevention and Response and Potestivo & Associates, a legal service provider to the default servicing industry. ROOF allows the previous owners of a property to stay in the home for up to three months after foreclosure. The occupant must pay all utilities, heat, water and electricity, and a monthly fee will be instituted on a “sliding scale” based on how much the owner can pay. During the pilot, the average monthly fee was $350 a month. At the end of the three-month term, if the property has not sold, options to renew would be available. Organizers originally targeted 24 homeowners during the pilot, but it turns out they reached out too late. Michigan has a mandatory six-month redemption period, in which the borrower has time after the foreclosure sale to redeem the home for what the bank received at the sale. “It did not work well,” said Steve Bancroft, the executive director at the Detroit Office of Foreclosure Prevention and Response. “We reached out too late in the foreclosure process.” Bancroft said 20 of the 24 properties were already abandoned by the time they got word out. Two of the homeowners already made other arrangements, but two did elect to participate in the program and stayed for nearly six months. Bancroft’s office hired an executive director to guide ROOF and they made pitches to several major lenders at the Mortgage Bankers Association conference last week. Bancroft said the response was positive. They’ve also reached out to national housing counselors to help them reach borrowers in tme. He said the new changes should take effect this year for another try. Two large servicers agreed to participate, but HousingWire could not immediately receive verification from those companies. The foreclosure crisis transformed Detroit. Blight is rampant. There are so many vacant properties, the city is electing to bulldoze them by the thousands. The population has dropped, but Bancroft stayed behind to implement a program that could help the city recover. “We can’t prevent every foreclosure, but we can prevent vacancies,” Bancroft said. For more on other rental initiatives, pick up the REO Management supplement accompanying the May issue of HousingWire. Write to Jon Prior. Follow him on Twitter: @JonAPrior