CitiMortgage Loan Mod SUCCESS!!

[loanmodwannabe]

Hi All,
Just found this site today and am seriously looking at a loan mod. We refinanced with Citi in Oct. 06 for 518K, current value could be around 250K (two bank owned homes on my block selling for 280, 299K with no takers). So, are we eligible for a loan mod? Does the fact that we already re-fi'ed hurt our chances? We are struggling month to month on our 2900/month mortgage. Our first loan is a 6.25 10 yr interest only (30 year fixed rate) and the second is an 8% 30 year fixed. At the end of each month, sometimes we have had to dip into savings. This month we had some unexpected expenses and have depleted our savings. We are holding on until we get our tax refund. We have been living frugally, have paid off our cars within the last two years and are trying to pay off our other debt and have gotten second jobs. I don't know if my loans with Citi are non-recourse or not since they bought my loan about a month after the re-fi went through. We will walk away, do a short sale, etc. if it comes down to it but we would like to stay in the house long term if the payment is affordable. I live in CA and we both have good stable government jobs. We feel that we cannot have another child, or one of our old cars cannot break down, b/c there is no way we can afford another $700/mo daycare or car loan payment. So, that's my story, what do you think?

Honestly - it would be a hard sell to Citi, the rate is not to terribly ugly at 6.25% I/O and the purpose of refi is also a hurdle. However, given that it was a refi, you may want to see if there were violations in the Reg Z and other Compliance issues that arise from a refinance to determine if you can "hold their feet to the fire" with modification or even reductions. Again I think with out serious violations it would be extremely difficult. Citi was in the habit of buying multiple "producers"/"lender" loans and it can be difficult, but not unheard of to have those violations.

If you want to proceed in that fashion you need to get out all of your original documents, closing documents and then do a QWR Demand to Citi for Life of Loan History, All Disclosures, TIL, Right to Cancel, copy of Appraisal, Lender Final HUD-1, copy of Note, Deed of Trust, all Riders and All Assignments of the Trust Deed recorded to date.

At the time you receive that obtain a qualified Document Review from an Attorney so that mediation or demands can be made. There is an Attorney associated with this site and there are those in your area, choose someone that is solid, reputable, experienced in this area of the law and you are comfortable with. By all means get the best legal advice you can on these issues at all steps of the process.

[loanmodwannabe]

Hi Poppy,
Thank you so much for your reply. I don't know all of the legalese behind my loan docs, and remember the appraiser justifiying his numbers in Oct '06 based on comps and current sale prices of like properties. It seems like everything was above board. I really applaud someone with your experience and wisdom taking the time to help greenhorns like me who bought at the top of the market... Well, last night was the beginning of the sleepness night stage. Looking back we should have known better even if this was our first - we just wrongfully assumed that it was buy now or be locked out of the market here in CA forever. We originally bought Feb '05 using an 80/20 5/1 ARM with a 2nd (HELOC). I saw the writing on the wall in Jan of '06, tried to sell that spring and summer, but we were too late. So, knowing we had to get out of the loan we re'fied in Oct '06 to a fixed. We have the security on a fixed rate, but the looming reality of a 10 yr I/O. Now, with depleting our savings, we realize it's just not worth the 3450/month cost of "ownership" when 99.9% of that $ is going to interest (we have a standard fixed 30 yr on the second that pays down $74 of the prinicipal each month) and we could rent a place like ours for $1600. Yesterday, I started looking at the possibility of walking away from the house. Because it's a re-fi I now know it is a recourse loan and the bank (both loans are from Citi) can go after us for the 99K on the second. My husband really wants to hold on, so we are going to try and talk to Citi first to see about a modification. A friend is going through a loan processor who is offering to negotiate with lenders for a flat fee of $1500. After reading the posts here though, I'm tempted to get my courage up and call the lender myself. I feel like I have to be prepared to mean what I say if Citi calls my bluff about walking away. If my first call to Citi is a bust, do I call again and again until I get a different answer, or should I pay someone to do it for us??? I feel really ignorant and frustrated right now.

[Moe Bedard]

Here is what has been happening in the loan modifications and pertaining to your story........
you are at a 6.25% 10 year interest only..........what is happening in the mods is that they are tacking on the principle and interest and taxes and insurance for a fully amortized payment. The reality of it is if you can't afford the interest only payment at the 6.25% you will not be able to afford a fully amortized loan mod payment.
Your best course of action in your given situation is what Poppy said to do and see if there were any violations of RESPA and TILA on your loan docs...
I would save the $1500 to a loan processor for a modification and contact Marshall Rosenbach on this forum for a doc review for violations which is much cheaper........
As Poppy said you would have a hard sell to Citi to try and get a modification on a 6.25% 10yr interest only and a second fixed at 8%....

Go after them on potential violations...........the outcome there might force them to do something with the rate but a straight forward modification won't....

Talk to Marshall........you have a good case
Keep us posted.....
Good Luck!!

You are most certainly not ignorant, but the frustrated part is understandable. Frankly I do not think that Citi will respond to bluff, open negotiation and mediation has always been my recommended position in these circumstances. Again, the rate is not bad, your I/O does not recast to fully amortizing until 10/2016 - 10 YR I/O. I seriously doubt that Citi will cut the rate or can cut the rate any deeper.

You can pay someone to try, but in my professional opinion, the results will be as above. That is not to say stranger things have happened, but I doubt it. Be extremely, I do mean extremely careful of who you pay and for what.....if it sounds to good to be true, it probably ain't true. My motto these days. Call if healthy professional skepticism, there should be a lot of that going around these days, a positive new epidemic. These folks now promising the sun, wind, moon and stars are the ones that were selling these toxic products originally on the same premise. When ya' can' t make the bucks on the front end - go to the back end.

By all means, call and broach the subject yourself, inquire, get relevant information from the Lender and what they are possibly willing to do. Do it from a positive slant. Information is power in the decision making process.

Meanwhile - if you decide on an exit strategy seek reputable, honest and experienced legal and financial advice......it will pay for itself in the long haul.

Please keep us posted, any information that you obtain from Citi, please share it goes to assist in the greater good. You are right to ask, you are right to question, you are right to give everything a try, just be careful.

[Moe Bedard]

Poppy and just to add to it as I have posted above........none of the lenders thus far are modifying or keeping the payments interest only......they are modifying them into fully amortized payments. So my thoughts were why pay 1500 for a third party to go after a potential modification that the outcome might entail payments higher than they are now..........versus pay Marshall to do the doc review which I think costs around 800 to do which might have a much more favorable outcome.......
IMO.........

*** is correct, you can get the same results by just paying extra each month and making a principal payment, without the costs of modification. I seriously doubt they would reduce the interest - ***?

A doc review is not out of line, it would provide accurate data as far as Reg Z and RESPA are concerned. If there are violations, then you grow some teeth for negotiations with the Lender.

[Moe Bedard]

That is correct............
Even if they agreed to reduce the interest from 6.25% they are not going to keep it interest only.............a fully amortized payment including PITI would be higher than it is now........
If it is stretching the budget now..........it will only get more difficult especially if you don't have any extra to put toward the principle now...
I think you have a good case to see if there were violations in your loan docs.........but as far as your rate right now for 10yrs.......most here would welcome a 6.25% IO 10yrs........I know I would, I am at 11.50% IO and adjusting March to 14.50% IO..........
Wanna Trade...

[loanmodwannabe]

Poppy and ***-
Thank you so much for your helpful responses. I'm going to talk over the options with my hubby, and having the docs reviewed is a good start. I also think that calling the attorney first isn't a bad diea. I'd like to have as much info as possible before talking to Citi. I'll post the response I get from them good or bad. Thanks again for your time. I hope more people find this website!

[Moe Bedard]

Just took a look and doc review for a combo 1st and 2nd from Marshall Rosenbach, who is licensed in CA. is $650......even better.
That is a wise decision to speak with the attorney first and to review those docs.........he might find something that would make your particular fight much easier..........
I am glad you found this sight too.......
Best of Luck to you and please do keep us posted on your progress.......

Thank you - we care here, and we have all had our own experiences, whether we are in or out of the industry. Find every option you have, make informed decisions, and do keep us posted on your travels down this path.

[loanmodwannabe]

We are going for the loan modification, but starting with a document review. I've read lots online about Citi, consumer protection complaints, etc., and this company is TOUGH to deal with. They seem behind the 8 ball in picking up on the loan mod trend. So, hopefully, like Poppy said, we can uncover something that will give us leverage before we actually make the first call. Thank God for this website. Seriously, there are so many scam sevices lurking online. Thank you Moe!

Citi is tough and there are issues with whether or not they really own your loan as they do service for other investors. All in all we have seen some rather interesting things from the "Big" Boys out there. As I said before, unless really serious flaws are discovered in the Docs, it may be tough to get them to take a hair cut, but I will never dissuade anyone from doing the Doc Review, frankly I am of the opinion the Doc review can uncover a lot of "sins" beyond just compliance and that in the long run knowledge is power and that is a good thing.

Please keep us posted on your progress and check in from time to time to let us know how you are doing.

[loanmodwannabe]

So, I'm in the modification process with Citimortgage and they want a new proposed budget with the new payment we are looking for. I thought they would submit their first offer, but they are asking me what I want. So, what do I ask for? The Consumer Credit Counseling Service states your housing expenses (PITI +utilities) should be around 38% of income, do I ask for that amount??? If so, then I would be asking Citi to reduce my monthly mortgage obligation to them by about 32%. Is that reasonable, realistic?? What is the rule of thumb for these modifications? How much "loss" are these banks allowing to be mitigated? My main talking point with them is that a 32% (or whatever amount we can live with) loss in monthly mortgage payments is more return on their investment than a foreclosure since we are now underwater 268K (and climbing). Any guidance or suggestions would be appreciated.

OK, the mortgage standard is 41 to 42% DTI in today's world....FNMA will go to 65% with an approve eligible....

The standard that we use in Loss Mitigation is not DTI, but household budget, all expenses including bills, utilities, insurance, gas (auto), etc...to the net income and from there it is determined what the surplus is...ideally 200 to 250.00 is the range that I am seeing, some will actually allow and underwater situation...

The figures that CCC is using is a front end figure for mortgage payment to gross income...FHA is 33%...so the figure they are using is out of date. Regardless they are talking apples to oranges, this is not front end underwriting...it is triage of a situation that is totally out of control for the Lender/Servicer and the Borrower.

Please so not use the front end model to ascertain that is what Citi or any of the Lender/Servicers are going to use.

[JulesK]

Hi loanmodwannabe,
May I ask when you started your loan mod with Citi? Also are you dealing with CitiResidential vs. CitiMortgage, etc? My husband and I are also going through loan mod with CitiResidential and today during the conversation with the Underwriter, I asked her if they would be approaching us about what we desired, but nope.
Trying to be patient...

[JulesK]

Originally Posted by Poppy

OK, the mortgage standard is 41 to 42% DTI in today's world....FNMA will go to 65% with an approve eligible....

The standard that we use in Loss Mitigation is not DTI, but household budget, all expenses including bills, utilities, insurance, gas (auto), etc...to the net income and from there it is determined what the surplus is...ideally 200 to 250.00 is the range that I am seeing, some will actually allow and underwater situation...

Poppy- does that mean that when the lenders are looking at whether to do a loan mod they will look at our "surplus" to determine whether a mod/loan will be approved? Also, when you say "underwater situation"- I think that means me, so would they not do a loan mod? I'm sorry, I'm just a bit confused... could you rephrase that?

Are you underwater with your present payment or the new payment, you should use the present payment....some will allow a deficit in the budget, like a negative amount left at the end of the month....however they are not allowing hundreds and hundreds of dollars negative. One will allow 500.00 negative, but that is not your lender....they then modify out of the deficit.

You may want to scoot into CCC's and see about having the consumer debt reduced by being in a CCC program to reduce the credit card and other unsecured debt to get the deficit down. Also talk with HOPE they are real good at skewing budgets for people and intervening with the lenders on that issue. HOPE 888.995. HOPE.

[loanmodwannabe]

Hi JulesK-
We are dealing with two different departments within Citimortgage, one for our 1st loan and another for our 2nd. The 2nd loan dept. has been quick to respond, but the first is moving at a glacial pace. I'll keep you all posted. I started the process by sending the QWR letter and application packet on 2/22.

Second mortgages are so entirely different from firsts and the fact is that they are able to respond more rapidly there than with the first as the first holds such a more preponderant position in the scheme of things....it is a much more complicated issue with the first due to the size of the debit and the relationship to the investor in the overall picture.

So with the investor relationships it is a slower and more "approval" based process as there are far more entities to satisfy in the process. The first has a greater exposure in the whole process....

Not to say that we are not seeing the seconds start to become somewhat problematic due to the pool insurance issues, that is a layer that you do not see, however all seconds are sold into the secondary market with a pool insurer on the pool and these insurers are becoming difficult now as they are realizing some tremendous losses.....that should not worry you unless you are looking for Short Sale or other remedies out side of modification. I expect that in the next few months that the seconds will slow down their responsiveness as well.

[loanmodwannabe]

I'm in full blown panic mode. I just got off the phone with Citimortgage Loss Mit and now they are telling me that I do not qualify for a loan mod on neither our 1st or 2nd because we have not been deliquent. This, after receving an email from my Loss Mit prospector just this morning who is working on my 2nd assuring me that it is under "mangagement review." The person on the phone said he would check with the loss mit rep working on my second. What gives?!! We are now contemplating looking at a short sale or walking away....It makes no sense that Citi would rather take a 50-70% hit on their initial investment than work with us on a modification.....

[loanmodwannabe]

Update re: Panic!
So, it turns out that if you call 866-272-4749 you're talking to someone in Collections, not Loss Mit, who does not know a thing about what's going on in the land of Loss Mit in CitiMortgage. After being told today by a customer service rep that we could not modify either of our loans, it was confirmed by a supervisor that our larger first loan backed by Fanny Mae, requires at least 2 or 3 months of delinquency before even being considered for a mod!!! So, I've been in email Spam-a-lot mode this afternoon and emailed all of the higher ups at Citi and "Investor relations" at Fanny Mae. Some good news: I was informed by my Loss Mit. rep for the 2nd, that my second loan is still in the "management review" stage. She said she would check out her contacts to verify that our 1st loan does or does not qualify for the mod. Should I contact another department at Fanny Mae? It does not make sense for their investors to lose 200+K in a preventable foreclosure instead of working out a loan mod with a borrower!?!! If we have to be delinquent for 3 months before we're even considered for a mod, we will attempt a short sale or walk. Where is the math or common sense in all of this???

If you are sitting in a FNMA product, it is fixed rate or a very vanilla ARM and they are rarely modifying those products, they will work forbearance, but not Modification on them...that is it....end of FNMA story....even in the situation of being 2 or 3 months late, they do not modify them, they do forbearance....the only time that they will modify one is if you have demonstrated, serious, extenuating and third party documented death of primary wage earner, serious life threatening illness (sometimes not then), etc....

FNMA will do forbearance, that is why they say go late, but no modification....that is the story really behind FNMA and there is no getting around it. You can let it go delinquent, but they will foreclose, they will try work out, however, they are very NOT prone to modify a FNMA product or FNMA pass through/supported/investor product ever. This is really not something that we are happy about, however it is the tack that FNMA takes and does not waiver from.

[loanmodwannabe]

Hi Poppy and everyone,
I just received a call about an hour ago from someone at Citi Loss Mit (at 7 PM EST!) in response to one of the many e-mails I fired off to the big-wigs at Citi today. He asked me what I was looking for in terms of reduction on the first loan. I explained to him what would work for us, and he is going to speak to his Fannie Mae rep tomorrow. He explained that he could not promise anything since delinquency is usually necessary, but since we are in such extreme negative equity, it is clearly in Fannie Mae's best interest to work with us. So, for now, I'm cautiously optimistic. Please please keep your fingers crossed for us... I am so close to only checking out the "So Your Going to Walk Away" and the "Foreclosure" side of the forum. My hubby is at the bookstore right now looking for books on this very topic...However, this call gives me hope, and to anyone out there the calls, e-mails, and faxes really do get you noticed.

You are right it is in FNMA's best interest and I would tell them that if they would listen.....the large institutions can make them listen better than I could all day long....FNMA has put out a program beginning at the end of April that will help their borrower's, however for the time being it is only a loan up to 15,000.00 (second/third) to allow arrearages to be brought current, there does not appear to be any though behind it to solve the underlying problem, the doggoned payments and the problems that people are having with them....

Please, fingers and toes are crossed for you.....and I will say a few...that FNMA has some degree of reasonability...I got that on one loan here for some people, but that was like pulling teeth from a turnip...and there was very documented third party type documentation of the hardship.