Anybody have any advice?

[TXCajun5]

My husband and I would appreciate any advice that anyone has.

In June of 2007 my husband’s company transferred us from TX to NY. We tried to sell our house, but it did not move. Therefore, we leased it out. To make a long story short….we had to evict 2 different sets of tenants form our house between 2007 and late 2008 because our tenants failed to pay rent for 7 of the 12 months that the house was leased out. Consequently, we tapped out all of our savings paying rent in NY and our mortgage in TX.

So my husband resigned from his job in NY, and we moved back to TX in June of 2008. During this process my husband was out of work for 4 to 5 months. Now, his new job pays less than his old one did, and our mortgage is behind.

In Dec. 2008, we sent (faxed) in paperwork to modify the loan. However, Citi claimed they never received it. In March, we re-submitted it. The only option they were willing to give us was to put us on a repayment plan that RAISED our mortgage $330.00 month. Our loan is a VA backed loan, and that is the only help that they were willing to do. So, that is what we did.

We scrounged and made this larger payment from March to June. In June we contacted Citi again, and asked for some other form of help. We were having a lot of difficulty paying the extra $330.00 a month. They told us to try to rent or sell the house. We agreed to try that approach again. We contacted 5 Realtors, and posted it for lease. Realtor after Realtor told us good luck on getting even close to what we owe. In fact, all 5 said they would not even list the house because of the way that the neighborhood had turned. They said there is no way that it will sell for what is owed on it, and a short sale is not likely either. In fact, they estimate we are upside down 30 to 40 thousand.

Most of this neighborhood is now rentals. In fact, many of the homes went into foreclosure, were bought by investors, and turned into Section 8 rentals. People walk the streets at night and 2 convenience stores within a mile and a half have been robbed in the last 3 months. The public school district is a failing district and crime is rampant. We even had a local policeman tell us to take our family and relocate no matter what the financial cost.

So, we decided to keep trying to lease it out. Nothing! We called Citi again. The guy we spoke to said don’t pay the July payment, and try to get a Realtor to list it. OK, did that again! Still, no luck with getting anyone to even list it. They just call us back and tell us that they are not interested in listing a house in our area.

However, now we do have one, and only one, person that is interested in leasing it for $350.00 less than that new mortgaged amount. But, rent amount would cover all but $20.00 of the entire original mortgage and escrow amount. Finally a ray of hope in this mess!

So, upon the advice of a Citi Mortgage Rep., we secured a new place to live for our family. Then I checked the mail…….Citi has now sent us a default letter. So, here we go again. We called Citi yesterday, and they now tell us that our repayment plan has been canceled because we did not make our payment on July 1, 2009. So, now we need to make an $8000.00 payment to get it out of default. We don't have $8000.00 to put into this house right now.

Of course there is no note in our file to state that a Rep. from Citi told us to do this. In fact, that Rep. is also the one that told us to go ahead and move, because vacant houses sell and lease faster. At this point I am guessing he lied to us about everything!

So, we asked Citi to defer the past due amount to the end of the loan so we can keep it leased out. The new Rep. just flat out said NO! They told us that since we have a VA backed loan that they WILL NOT do that. From what I have read about VA loans, they can do it, they are just refusing. They automatically told us to go on-line and do a request for a Deed-in-Lieu of foreclosure form. OK……that might be the easy way out for Citi, but we would like to save some portion of our credit, and not be in debt to the VA for years to come.

With all of the foreclosures on the market, we cannot imagine why ANY BANK would want another foreclosed, empty house, when there is another option.

Bottom line…..we are behind on payments, have a renter for Aug. 1, 2009 that can pay the original mortgaged amount, and Citi would rather do a foreclosure or a deed-in lieu rather than push the past due amount to the end of the note. We have had this loan for 6 ½ years, and have not had any problems prior to this situation. Our interest rate is 4.75 fixed on a 30 year term.

If a deed-in-lieu is done, or if the house goes into foreclosure it is only going to bring about 50 cents on the dollar. On my street alone there have been 5 foreclosures in the last 2 years. These homes have all sold for around half of their original purchase value. In fact, the house right next door to us is currently in foreclosure. It has been vacant and for sale for 6 months or better.

Is there anything that we can do at this point? We are now bound to a lease on another home (due to a Citi Rep. telling us to move), and in default on our home loan (due to the same Citi Rep. telling us not to pay the July payment). We have a renter, but we are now scared that Citi Bank might now foreclose.

Does anyone have any ideas? Ideally we would like to see the delinquent amount pushed to the end of the note, and be able to keep the house leased out. This would keep it from going into foreclosure. It would also save what is left of our credit.
Why does this solution not seem reasonable enough for Citi Mortgage? It just seems like Citi is being very harsh considering the current housing market.

[SillyWorld]

Read the other post

Thanks

[TXCajun5]

Got it! Thanks!