Short Sale - CitiMortage 1st/Citibank 2nd

[darsven]

ffice:smarttags" name="City">ffice:smarttags" name="place"> >Loan-Safe Pals,
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I am working on a short sale with Citi Mortgage (1^st) and Citibank (2^nd) right now and this forum has been so helpful to me I thought I only fair to share my experience so far.
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• Bought a new construction home in Chino Hills, Ca. in 2005 for $928k and put approximately $150k into the front and back yard
• I am on the last 2 years of a 5% 5/1 ARM for the 1^st and the 2^nd is an adjustable HELOC @ around 3% right now.
• Home values hit 1.2 Million in the Summer of 2007
• My salary decreased due to bonus reductions over the last 2 years by about $40k yearly. Wife took a pay cut ($15k?) to work closer to home and the kids. Even though we are well-compensated, this house has been taking most of our income for some time ($400+ electric bills, etc)
• We have been making our mortgage payments within the grace period, no late payments on record.
• We have a significant amount of consumer debt that has piled up over the last 4 years in part from pumping money into this house. Not smart L but it is as it is.
• My wife’s job was moved a month ago from Chino Hills to lace w:st="on">L.A.lace> This is a 2 hour drive from C.H. one-way, and is not an option with 3 kids. So we are now renting a home in lace w:st="on">Torrancelace>, Ca.
• I contacted my real estate agent (a real pro if anyone needs one in lace w:st="on">Southern Californialace> – She is a god-send) and started the process of listing the house.
• House was listed on 9/18 at the agents suggestion for $749k (Beautifully kept, premium view lot, etc) with the highest sale in the past year being $725k and $710k in the last 6 months.
• Listed the house after taking our personal items out of it and leaving our furniture and décor. Made it look like a model. Agent had beautiful pictures professionally taken and 4 page full color flyers made, as well as listed it on all the top sites/MLS and you tube. Got a $745k CASH offer after the first weekend of showing (9/21). The buyer was aware it was a short sale and stated in their offer they would be willing to work with the bank and us to make this happen.
• Full packet was submitted to the bank 9/24. Agent took care to add a table of contents, double check all signatures, put loan numbers on every page and number them, etc. She claimed that this can get it priority handling, as so many packets are incomplete and difficult to manage. They handle the cleanest submissions first she says.
• On 9/25, we got a notice on our Citimortgage.com account that they are actively reviewing our information. It said to expect the review process to take approx. 30 business days.
• On 9/28, both mine and my wife’s credit reports were pulled per creditexpert.com
• On 9/29, my agent talked to the negotiator that had been assigned and she said they wanted to order an interior BPO (Buyers Price Opinion – Appraisal) This was scheduled immediately and the BPO was done on Friday 10/2.
• BPO came in on Monday 10/5 @ $710k – According to my agent, they were almost ready to push for an approval that day…But, there was a snag.
• On 10/7, we were notified that the HUD-1 that we provided didn’t mention the 2^nd mortgage/HELOC held by their sister company, Citibank. They asked for a revised HUD-1 where we have indicated our offer of payment to both the 1^st and 2^nd based on the proceeds of the sale and a copy of the most recent statement for the 2^nd.
• Bank stated on 10/7 that they will resubmit and it could be up to 30 days for a review/approval. My agent reminded the negotiator that we have an over BPO cash offer on the table, but if they let that fall out, that we have plenty of backup offers @ around the $710k level for them Agent seems to think this will take a week or so for them to come back with an approval.
• At this point, we have all escrow paperwork filed and I am thinking things seem to be working pretty smoothly.

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Thoughts?

[Evan Bedard]

Hi darsven welcome and thank you for joining.

Bank stated on 10/7 that they will resubmit and it could be up to 30 days for a review/approval. My agent reminded the negotiator that we have an over BPO cash offer on the table, but if they let that fall out, that we have plenty of backup offers @ around the $710k level for them Agent seems to think this will take a week or so for them to come back with an approval.
At this point, we have all escrow paperwork filed and I am thinking things seem to be working pretty smoothly.

Looks like everything is right on track and your agent seems to be doing a great job staying on top of your case. But personally I would think that it will take longer than a week to complete the short sale. As the 1st and 2nd lender will both have to approve the price. But it should not take too long, plus you have a good offer for them on the table..

Good luck and keep us posted!

[darsven]

Thanks for the reply, I am hoping for the best and have been pleased with both my agent's work and Citi's response to date.

Do you know anything about State debt forgiveness in California? I know that the Federal government will not tax me on this debt, but is there anything happening to incorporate this type of relief into the state tax code?

Thanks! - D

[darsven]

My agent just spoke to the negotiator at Citi. The corrected paperwork that was FAXed to her last week never reached her desk. We finally realized that the FAX number used was the general FAX instead of her dedicated FAX. We lost 4 business days but she has everything now and Citi has agreed to communicate via email in order to expedite the process.

The negotiator will send the corrected HUD-1 and payoff demand on the second for final review this morning. We will talk again on Friday if she does not yet have the final approval by then.

What a crummy reason for delay on an otherwise speedy short sale!

[Evan Bedard]

My agent just spoke to the negotiator at Citi. The corrected paperwork that was FAXed to her last week never reached her desk. We finally realized that the FAX number used was the general FAX instead of her dedicated FAX. We lost 4 business days but she has everything now and Citi has agreed to communicate via email in order to expedite the process.

The negotiator will send the corrected HUD-1 and payoff demand on the second for final review this morning. We will talk again on Friday if she does not yet have the final approval by then.

What a crummy reason for delay on an otherwise speedy short sale!

Wow I can't believe how smoothly the process seems to be going for you! Great job!

Good luck and keep us posted!

[darsven]

UPDATE! On Thursday 10/29, Citimortgage and Citibank approved our Short Sell offer! Our negotiator says that the Escrow instructions will be sent within 3-5 days of the approval, so we are thinking that the paperwork will make it to Escrow before Thursday of this week. I can't believe it. I think that this is a testament to professional handling by an experienced agent and a motivated and concientious negotiator/closer. The buyers want to close in 5 days since this is a full cash offer. If anything, the worst part is that we are in a crunch to get our stuff out over the next week. We are blessed. PM me if you want an Orange County/IE real estate agent that comes well recommended! I will post again when we close to seal the deal.

[Focused]

Congratulations to you!

I tried to send you a PM, but for some reason could not. I am in the same position with Citi (Both 1st and 2nd) but live in Oregon. We plan to start the short sale process in January.

Could you either send me a pm or post your short sale contact information at Citi? I have a feeling that with this company having a good contact is very valuable. We are in the process of finding an agent up here for the short sale and want to give them the best info to negotiate for us.

Thank you!

[darsven]

Alright...Citi just asked last night (11/3) if we can bring $2-3k cash to close. I have heard this pitch before in the other Loan Safe postings.

We countered yesterday saying we would scratch up $2k if Citi would agree to report this paid as agreed and received. Here was our pitch:


Under separate cover I am sending you the MLS printout and Listing History Report. There were no price reductions. I had a lot of interest right away.

There have been 22 showings per the lockbox report and I have received 4 offers. The one you have is all cash for $745,000. The next one in line is for $719,000 with 80% financing. The third is for $700,000 and is all cash and the 4th is for $685,000 with 50% financing.

I have received numerous calls from agents who were going to write offers between $685,000 and $710,000. I explained that I had better offers than that and to submit their best and final, which they never did.

As you are aware the last 3 homes in the neighborhood that are the same model all sold or will close in the next few weeks for $710,000. Luckily this buyer is not doing an appraisal and her agent is well aware she is overpaying for the home.

My clients will find a way to come up with $2,000 to get this offer accepted and the short sale approved only if Citi will agree to accept the short sale as "paid as agreed" on both loans and report as such to the credit bureaus.

Please let me know if you need anything else. Thank you so much for your prompt response.>

We received this response this morning:

Short sales are reported to the credit bureau as "paid in full for less than the full balance". They will also be sent a 1099C if the loss is greater than $600.00.

Thanks,
The Closer>

I have been paying my mortgage on time throughout the 4 years I have had this loan.

Anyone have any idea what I can do to push this up higher and get an agreement on a "paid as agreed" reporting?

D

[darsven]

Bank asked for an additional $2-3k in closing costs yesterday. We asked if they would show the loans as paid as agreed if we paid $2k in closing costs. The closer stated that Citimortgage always reports Short Sales as: Paid in Full for less than the amount owed. Sooooooooo......

My response to the bank regarding the additional $ for closing costs:

At this time we are paying rent of $2,000 monthly on top of our 1st/2nd mortgage (Faithfully being paid as agreed even though we are engaged in the short-sell process).

Additionally, we are repaying credit card debt at over $3,000 monthly.

Borrowing this money is not currently an option. I would be glad to show our latest bank statements to corroborate our lack of cash and inability to pay any closing costs.

The bank's response:

Agent:

Thank you. I appreciate all you have done to make this happen. I will present the file to underwriting without asking for funds to close.

Closer

So its off to underwriting exactly 40 days after submittal. Wish me luck!

[Evan Bedard]

So its off to underwriting exactly 40 days after submittal. Wish me luck!

Wow I cannot believe how smooth and quick the process has been coming along.

In the short sales I have seen go through the lender will generally still issue a 1099 for the deficiency balance. Hopefully you can negotiate and get them to report the debt as paid in full.

Good luck and keep us posted on your results.

[darsven]

House closed yesterday, 11/16 (Buyer wanted to close on 11/13, but it was too quick for us). It is bittersweet, but we will no doubt have better luck with our next home purchase We are much wiser for the experience. Citibank/Citimortgage were reasonable, straightforward, and for the most part great to work with. Orange County, L.A., and Inland Empire California folks looking for a good agent for Sales/Purchases or short sales, let me know. I'd be glad to pass my top notch agent's name along.

Thanks,
Daryl