Trying to settle a 2nd with Citi in Utah

[lerigolo]

Hello all,
I am looking for some advice on settling my second. I have already read the thread on settling seconds, but I deviated from the plan slightly. My house is in Utah and it was purchased with an 80/20 from Aurora/Citi for about $500k. My house is now worth less than my first mortgage, ~400k, and my second is completely underwater. I was able to mod my loans but just found out that I am going to see a reduction in income of about $1000 net per month, which is putting me in a bind.

I stopped paying my second three months ago and ignored calls from Citi until they stopped calling and sent a letter letting me know that they would start sending people out to make sure my house was occupied and that it was being taken care of, as frequently as they would like and charged to me.

I emailed Frank Eliason, because it concerned me that I would be digging into a hole. Got a call from Citi's Exec Response Team and started the overall process. Now they are asking me for a bunch of documentation, financials, hardship affidavit, etc, when I was talking to the rep about settling the loan for less than owed. I remember reading in the 3700 post blog that they did not need financials to decide that the house was way underwater and that they were better off settling.

Do I need to just ignore them again? Did I make a mistake by deviating from the plan and reaching out to Frank Eliason?

Did you all have the same experience? When you settled did you have to disclose all of this? I dont mind giving the info, but it smells of the modification process with the endless submission of documents not received and all the run around I had to go through.

I appreciate any input you might have!

Thank you so much and I will keep you posted!

lerigolo

[TomEason]

lerigolo

Thanks for your post and welcome to Loansafe.

IMHO, you've erred by straying from the strategy and by reaching out to Frank Eliason. But you can get back on the right path; those mistakes are not fatal.

In accordance with the guide, never disclose your financials; 2nd lenders don't need that stuff in order to settle.

It matters not a wit that Citi threatened to charge fees for frequent inspection reports. Why? Because you won't be paying your 2nd anyway, so who cares?

I recommend you revisit the thread and re-read the strategy guide piece at post #1. Good luck!

Strategy for Settling Your 2nd

[LVScooby]

lerigolo, I am in a similar situation and trying to settle with Citi via Frank, then the rep he referred me to, then an underwriter. I disclosed all financials as there truly is a hardship. In good faith I made an offer of what I can comfortably afford @ 4%. The underwriter emailed me back with a counter offer of 10% and again wanting to know my hardship. I explained the hardship again and increased my offer to 5% asking for 30 days to submit the final 1%. I received an email two hours later stating that my offer, which was quoted at the wrong amount, was declined and the file was now closed.

I truly am perplexed by this action.

Are they just playing games here? Quote the wrong dollar amount, say it is declined and file closed with no explanation...to get some reaction? Do they think I will have equity in this house in the next few months before FM takes it back? Or are they going to use the financials I submitted to seek a judgement and garnish wages? I thought I had read on here that Citi was going to be willing to work with folks in our situation.

[TomEason]

LVScooby

Thanks for your post. You haven't yet read the strategy guide piece? If you have, I recommend you read it again. All your questions are answered there.

You might also realize that, if your 2nd is underwater, you enjoy the leverage in settlement negotiations. Until you realize that, Citi's negotiators will continue to intimidate and take advantage of you.

[lerigolo]

Thanks for letting me know your situation LVScooby... That is exactly what I was wondering.

My thought process in going that route was, having read the entire 3700 posts in the blog, along with posts that were elsewhere was.... It seemed as though there were a lot of really frustrated people on the website having to deal with Citi. Then, frequently, I would hear the need to reach out to Frank or Mike (?) to see if they could help because they frequent this site. As I read, I seemed most of those situations ended positively. In a short period of time things would be taken care of and it seemed that this avoided a lot of the bureacracy at Citi.

That being said, I now cant remember specifically if it was for a settlement or for a loan modification that this was helping. Do you mind sharing the name of the individual you were working with?

Thank you so much for posting on here!!
lerigolo

[lerigolo]

Hey Tom,
Can you give me a little more clarification? I dont remember reading this in that really long thread. What precipitates the offer letter from Citi to try and settle your 2nd mortgage? It seemed like something needed to cause that to happen!?

Honestly, I thought I was going the best route, having read not only the settling your 2nd post but also many other posts within this site. Seemed like Frank was the right person to contact and especially when I heard back from the Exec Response Team, or whatever they are called, I thought I was still going the right direction.

Guess I do need to start over...

Thanks Tom! I am not second guessing a strategy that has worked so well, I just thought to morph that into a combination of other experiences as well.

lerigolo

[TomEason]

lerigolo

Thanks for your post. I'm afraid I'm not clear about what you need clarification.

If it's this question

What precipitates the offer letter from Citi to try and settle your 2nd mortgage? It seemed like something needed to cause that to happen!?

the answer is in the strategy piece. You might want to re-read that guide at post #1.

You might also visit this thread to view some success stories. Success Stories in Settling 2nds

Good luck.