Citi Mod Help!

[Shayn]

Hello my name is Shayn and I am a foreclosee “hi Shayn”. This is my first post and as a lot of others say I am grateful for people like you who read and possibly help people like me. I have many questions and I am uncertain of who I can trust and desperately need to understand the options I have or the gravity of my situation. I have read through the forums for a week now and I am trying to grasp all that is said however it is difficult with each person having slightly different situations.
Situation:
I was “let go” and without a job for over a year. I paid my mortgage for about half of that and I kept in contact with my mortgage company (Citi Mortgage). I live in Kansas by the way. Half way through I fell behind which I knew I would as did Citi. After being late for a month I was contacted by Citi and I worked out a plan where I could pay a discounted amount for three months. After that I was unable to pay my mortgage and I missed 4 months payments.
I now have a job woohoo! I sent in 2 payments but then stopped because I was so far in dept to so many other areas that I could not maintain everything. Before I stopped I called Citi and tried to figure out something I could do to get caught up (this was before I starting reading about foreclosure). They asked me about my income and bills bla bla bla. At the end they said there was no program that I would qualify for. They offered me an assistance loan for the amount that I was in arrears. I had a few days to look it over and return it. When I received it I noticed that it was very expensive i.e. high interest rate. My thought at the time was the penalty fee (which I found out I had been accruing since I missed my first payment) would be cheaper than the interest rate they wanted to charge me. So I figured I would just pay it off as I got extra money.
Well I called them the other day and they said my loan was now in foreclosure and an attorney had been assigned. I asked if there was anything we could do and she again took all my financial information and told me that they would call me in two weeks. So today I received a letter from an attorney discussing the foreclosure of my home.
I have began to research all of this as I am pretty ignorant to this whole process. So far I know that Kansas is a court administered foreclosure state which I guess can drag out the process and I know that the mortgage company does NOT have a sale date for my home. I guess there are two powers at work here, one being the foreclosure department and the other being the mitigation department.
Questions:
1.Is it even possible this late in the game to ask for a modification?
2.I have heard that the mortgage companies will not help you if you are outside of 38%?
3.Should I seek assistance by one of these foreclosure companies?
4.I have crunched some numbers and I can get under 38% but they will have to waive all penalty fees as well as drop my interest rate from 7.25% to 4.75%, is this realistic?
5.How much can I really trust the loss mitigation department?
I do not want to lose my home and bankruptcy, although not ideal, is an option.
I appreciate all information regarding my situation and I hope there is some light at the end of the tunnel. Thank you,
Shayn

[Shayn]

Well I did not get allot of information from anyone concerning my specific post so I went ahead and took the plunge and thought I would post my information so that maybe somebody else may benefit. Today I called the loss mitigation department for Citi. Getting served a summons by the attorney was a pretty good motivator. I asked for a Loss Mitigation Specialist which the gentleman said he was. I told him that I had talked to them a week ago but I had new information and I wanted to do a modification. This was my first attempt at a modification.

This time I was prepared with the exact averages of each bill that I pay per month. I gave this information to him. He put this info into the computer but at some point he asked for my gross income. After about 20 min of explaining that my gross income should not be a factor he computed my Net income and came to the conclusion that I in fact would qualify. I did have to explain to him right before this that I had been without an income for over a year and I owed thousands of dollars to many different places which by the way is 100% true. As an FYI I would not BS these folks. I am not for certain but I think they are honestly on your side. So he gave me the numbers and said that my loan would go from a 7.25% interest rate to 2.75% which is incredible. He called off the dogs with the attorneys and told me how the payment structure would go etc. The only thing that he said which I still to not understand was that Citi would be paying my property taxes? If anyone has insight as to why that would be I would like to hear it. I assume it is to alleviate some of the debt but I would like to make sure it does not offer some ill effect to me.

So basically I took this on myself, armed with the knowledge gained from these forums and Google. I have a fixed 30 year loan which is FNMA backed and my Modification trial period is set at 2.75%. I have to do this for 3 months at which time I guess they will review it. I am not sure if this means that I am good or not but for now I am going to bask in my glory of knowing that I will not lose my home. I will keep updating this as new information arises. If anyone has info on the property tax thing please feel free to comment. BTW they are looking at the 31% D2I:. The guy I had was great about working the system. He put several numbers in till we figured out how to push it through. All in all I feel elated and I really wish I would have done this sooner. It would have saved a great many sleepless nights. Thanks to everyone who has posted with great information. It really does make a difference.

Shayn

[Evan Bedard]

Hi Shayn welcome and thank you for joining.

So basically I took this on myself, armed with the knowledge gained from these forums and Google. I have a fixed 30 year loan which is FNMA backed and my Modification trial period is set at 2.75%. I have to do this for 3 months at which time I guess they will review it. I am not sure if this means that I am good or not but for now I am going to bask in my glory of knowing that I will not lose my home. I will keep updating this as new information arises. If anyone has info on the property tax thing please feel free to comment. BTW they are looking at the 31% D2I:. The guy I had was great about working the system. He put several numbers in till we figured out how to push it through. All in all I feel elated and I really wish I would have done this sooner. It would have saved a great many sleepless nights. Thanks to everyone who has posted with great information. It really does make a difference.

Congratulations that is truly amazing how quick they came up with a decision. Good idea contacting loss mitigation they are usually the best department to deal with. There are many homeowners here in the trial period as well and some who have completed it..

[davephx]

Gross income x 31% is your PITI target (Principal, Interest, Taxes and Insurance)

They require escrow for taxes and insurance as many did originally.

The target less taxes and insurance is the amount available to pay principal and interest on the modified loan which also rolls up any back payments due.

[Shayn]

Thanks Dave,
That makes complete sense regarding the property taxes. Will this amount eventually be paid by me or does this entitle the mortgage company to my land somehow? I am slightly paranoid about a misstep since this is all Greek to me.

One other thing is how can they possibly use your gross income? This seems like the most ridiculous idea ever. There was a huge gap in my gross and my net and although I wish I could adjust the size of the governments hand I cannot. They take what they take and I am only able to pay from how much I actually get! The modification was directly related to this and if you did the equations with my gross income then the computer said I had enough money to pay for my existing loan. Only after we used my net income did the numbers make sense and I was able to get a reduction in my interest rate.