Credit Impact - Walking Away - Citibank Loan - California, Fontana

[FontanaFire]

Just want to give you all some information that we would've found useful prior to taking the plunge:

Purchased our home for $525K in 2006. Citibank owns 1st mortgage, $425K. Bank of NY owns 2nd, but they only deal with us through loan servicer SLC. Today, our home won't sell for a penny over $260K. We are in the Inland Empire, the 2nd highest rate of foreclosures in the country. All home values have plummeted as a result.

So, we can afford our home. But being new parents, in our 30's & 40's, we have to look out for our financial future. We can rent our exact same model, in our neighborhood, for $1900 a month. Currently, with taxes, our home cost $3400 a month - and that is interest only. Citibank gave us the modification run around. Rejected us once. Then the Federal settlement came along. Citibank rejected us again. Said our income was 2% higher than it needed to be to qualify. 'We've concluded that this financial situation just isn't tenable.

We tried to get info about the impact this would have on our credit but what we found was limited. So here's our experience so far:

Started with 793 score on Experian. We have 2 credit cards. Only use AMEX and pay it off in full every month. Took out a vehicle loan in May (might as well get the vehicle we'll need next year now, while we still have good credit!). In June, got our first 30 day late hit. My credit is now 713. An 80 point drop. That's a bit more than I expected. It may be due to taking out the vehicle loan, installment credit.

I will update monthly to show what the impact to our credit has been.

[Pejutah]

I'm glad your credit has only fallen that little, that's terrific. BUT, many of us on here have seen a far greater drop. For myself; 801 to 560...with no other lates other than the mortgage and very little credit debt otherwise, well under 3000.00.
So my sense is there is no hard/fast rule about what kind of hit you'll take. For some, the foreclosure/ss has barely touched their credit, for others, like myself, it totally slams them. I'd imagine if you took any given group of people, with similar credit histories, and similar credit scores and ran them through this mill, each one of them would end up with something different in terms of how it effected their credit scores

Good news, it seems, and this remains to be actually seen for myself, is that many on here report that in spite of the hit, however low it may be, it does recover rather quickly after it's all over. This presumes, of course, that the person is making timely payments on all other debt.

[Evan Bedard]

Their credit actually took a 80 point hit which is large drop after only one missed payment.

FantanaFire - Are you still pursuing a loan modification at this time or are you planning on walking away from the property?

[Pejutah]

Their credit actually took a 80 point hit which is large drop after only one missed payment.

FantanaFire - Are you still pursuing a loan modification at this time or are you planning on walking away from the property?

True Evan, that's a lot....I think I was just meaning to say there doesn't seem to be any way to predict it all.
None of us should be taking a hit at all in this game...dadgummit!
I wonder if credit rating fico and mortgage companies will have to adjust something in the future in order to keep going business-wise. We are a worthwhile group risk wise, I think. Especially if the only blight on our records is this mortgage fiasco.

[FontanaFire]

Hi Evan & Pejutah



Evan: At this time we are not seeking a modification. We did that twice before & were rejected. I am expecting a 7% drop in pay in August, so we will try again at that time. Do you know how to time the modification request so that it delays the foreclosure process? For instance, would requesting modification after being 60 days late delay the foreclosure or would waiting until notice of foreclosure action is given be more effective?

In the end, we will walk away. We are open to modification, but Citibank isn't offering any principal reduction, which is the only thing that makes financial sense for us. If they change their stance and make a decent offer we will stay. We love our home.

Pejutah: Since you've already been through this, can you shed some light for me? I know there is a 30, 60 and 90 day credit hit. But does the foreclosure add an additional hit? If its just the 30, 60, 90, then an 80 point hit for 1 month late seems to be approximately what you suffered. But if there's a 4th hit...Damn, Damn Damn!

[OverandDone]

I got a total of about a 150 point drop after it is all said and done and foreclosure final. Five months after it is finished and the second charged off I went up 50 points so still 100 points down.

[Evan Bedard]

Evan: At this time we are not seeking a modification. We did that twice before & were rejected. I am expecting a 7% drop in pay in August, so we will try again at that time. Do you know how to time the modification request so that it delays the foreclosure process? For instance, would requesting modification after being 60 days late delay the foreclosure or would waiting until notice of foreclosure action is given be more effective?

In the end, we will walk away. We are open to modification, but Citibank isn't offering any principal reduction, which is the only thing that makes financial sense for us. If they change their stance and make a decent offer we will stay. We love our home.

You may want to contact Citi and ask them who your investor is on the account. Citi is one of the 5 mortgage servicers participating in the national mortgage settlement which may offer principle reductions to those who qualify..

What is the National Mortgage Settlement?

The National Mortgage Settlement is an agreement between state attorneys general and major loan servicers, including CitiMortgage, Inc. This agreement provides relief to eligible borrowers through improved servicing standards and borrower assistance programs. In response to this settlement, Citi is offering a range of options, including new programs designed to assist:

• Homeowners who are current on their mortgage, but whose home has negative equity (meaning more is owed on the home than it is worth).
• Homeowners with a first and/or second mortgage who are having trouble making payments or have missed payments.
• Borrowers who lost their home to foreclosure between January 1, 2008 and December 31, 2011.

Eligibility Overview

Eligibility guidelines for National Mortgage Settlement assistance programs require that your mortgage is owned and serviced by CitiMortgage. Loans that are owned by others, such as Freddie Mac or Fannie Mae, are not eligible under the Settlement guidelines, but may qualify for other Citi solutions.

https://www.citimortgage.com/Mortgag...age=settlement

National Mortgage Settlement Information and FAQs

National Mortgage Settlement

[Pejutah]

Pejutah: Since you've already been through this, can you shed some light for me? I know there is a 30, 60 and 90 day credit hit. But does the foreclosure add an additional hit? If its just the 30, 60, 90, then an 80 point hit for 1 month late seems to be approximately what you suffered. But if there's a 4th hit...Damn, Damn Damn![/QUOTE]



Hi Fontana,
I wish I could give you a better sense of it all, but I can't. I'm still going through the process and am in month 9 of the walk. Still no NOD. At worst so far, my credit went from 805 or so, like I said, down to 560 at the two month mark. It remained there until my second charged off, and then went to 630--where it's remained for three months. Can't say what will happen when all is said and done yet, because all isn't said, and it's not done! Damn is right!
P

[FontanaFire]

Thanks Evan. Yeah. We got all excited about the National Mortgage Settlement. Citibank actually owns the note. They gave us the big reject. But the agent was syrupy sweet, told me to just hang on a few months because her supervisors were looking at ways to make it work for people like us, yada yada. Good thing we are done with being strung along by "possibilities." Two months have passed without us paying a penny and Citibank only called once. The servicer on our second loan sent us an unsolicited mortgage modification via Fed Ex yesterday and call daily! I can't for the life of me figure out why loansafe.org is speaking so highly of Citibank. I wonder if they have a financial stake in loansafe?

[FontanaFire]

Thanks for the information overand done.

[Evan Bedard]

Two months have passed without us paying a penny and Citibank only called once. The servicer on our second loan sent us an unsolicited mortgage modification via Fed Ex yesterday and call daily! I can't for the life of me figure out why loansafe.org is speaking so highly of Citibank. I wonder if they have a financial stake in loansafe?

It's not that LS is speaking highly of Citi or saying they are better than any other bank, but they are just the only one that have reached out to LS personally and even assigned two reps from Citi (Michael and Frank) to help members here in the forum. Besides that there is no relationship between LS and Citi..

[FontanaFire]

It's not that LS is speaking highly of Citi or saying they are better than any other bank, but they are just the only one that have reached out to LS personally and even assigned two reps from Citi (Michael and Frank) to help members here in the forum. Besides that there is no relationship between LS and Citi..

Oh! O.k., well that's good to know. I stand corrected too. Citibank has been contacting us through my husband. We just stopped talking about the calls & emails because we don't intend to respond. But next month we should have a different (worse, but not bad) financial picture so we'll contact them then. Maybe. I think I'll reach out to Frank and Michael. But based on passed experience, no reaching out with any hope!