2nd Mortgage EXTINGUISHED by Citi Mortgage under 2MP Program!

IamRJsDad

LoanSafe Member
Nov 9, 2011
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This is the first time I have ever posted anythign online, but I felt it would really help other out to start a discussion on this. I have previosult modified my 1st loan with Citi Mortgage under the HAMP program; I am current with that payment. I stopped making payments on my 2nd loan since about 2009 (also with Citi). I called last week to see what could be done regarding my 2nd loan. They informed me that I qualified under the 2MP program which is part of the HAMP program; all i need to do was sign a Dodd-Frank Certification and my loan would be extinguished. I immediately signed and returned via fax the Dodd-Frank Cert and faxed it in. This week I called to verify and they indeed have extinguished my 2nd loan of about $170,000....

I asked the person i spoke to regarding the guidelines for the program as I have clients and friends that could use this program; but she was not that willing to help. I did some research myself but didnt find much besides a description of the 2MP program. My understanding is that the propgram either 1) modifies the payment, 2) a partial extinguishment, or 3) a full extinguishment; I am wondering if anyone here know more details of the program or where i can find more details. Especially what factors determine which option you qualify for?

I am assuming the the properties value comes into play since my property is still upside down even with only my first loan.

Any guidance would be appreciated.
 

Cat Damiano

Mortgage Wars
Sep 10, 2007
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Hi IamRJsDad,


Welcome to the forum and thank you for joining................

Congratulations on the modification and having the second lien fully extinguished. The 2mp program doesn't always end in an extinguished lien for everyone, there is a criteria that the servicer follows and the first lien would have needed to be modified under the HAMP program.

When a borrower’s first lien is modified under HAMP, the 2MP servicer must offer to modify or extinguish the corresponding second lien according to the steps outlined below. In addition, if the borrower’s first lien is modified under HAMP, the 2MP servicer must dismiss any outstanding foreclosure action on the borrower’s second lien.

Step 1: Capitalization

In the first step, the 2MP servicer capitalizes accrued interest and servicing advances (costs and expenses incurred in performing second lien servicing obligations, such as those related to preservation and protection of the security property and enforcement of the mortgage) paid to third parties in the ordinary course of business and not retained by the 2MP servicer, if allowed by applicable state law. Accrued interest may be waived or deferred at the discretion of the 2MP servicer.

Step 2: Reduce Interest Rate

In the second step, the 2MP servicer reduces the interest rate of the second lien to 1.0 percent. After five years, the interest rate on the second lien will reset at the then-current interest rate on the HAMP-modified first lien.

Step 3: Extend Term

In the third step, if the original term of the second lien is shorter than the remaining term of the HAMP-modified first lien, the 2MP servicer extends the term of the second lien to match, at a minimum, the term of the HAMP-modified first lien. The 2MP servicer must amortize the modified UPB of the second lien over the term of the modified second lien.

Step 4: Principal Forbearance / Principal Forgiveness

In the fourth step, if there was principal forbearance or forgiveness on the HAMP-modified first lien, a 2MP servicer must forbear or forgive principal on the second lien in at least the same proportion; however, the 2MP servicer may, in its discretion and in accordance with investor guidelines, forbear or forgive more than the required proportionate amount.

Step 5.1: Partial Extinguishment Option

In addition to any required forgiveness of the 2MP modification waterfall, 2MP servicers may, at their discretion and when permitted under applicable investor guidelines, agree to partial extinguishment of additional principal as part of a 2MP modification and will be eligible for both modification incentives and extinguishment incentives on any partial amount of principal that is extinguished so long as the UPB of the second lien at initial consideration for 2MP is equal to or greater than $5,000 and the second lien has a pre-modification scheduled monthly payment equal to or greater than $100.

Step 5.2: Full Extinguishment Option

As an alternative to modifying an eligible second lien, a 2MP servicer, in accordance with investor guidelines, may elect to extinguish second lien in exchange for a lump sum payment from the program. A 2MP servicers may, at their discretion, fully extinguish a second lien with a UPB at initial consideration for 2MP of less than $5,000 or a pre-modification scheduled monthly payment less than $100.
 

Tarin Myhairout

LoanSafe Member
Oct 31, 2011
320
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Twin Cities, MN
Welcome IamRJsDaD!

That is great news for you, and I agree that it warrants its own thread!

I had known a little bit about this part of HAMP, but didn't see how it could possibly ever be implemented by the same servicers who can't send out accurate account statements - and that is only arithmetic! I'm glad to see it might finally be working.

Even if you aren't above water yet, it is good to know that you have that possibility down the road. With a huge 2nd lurking out there, it would have been a bad joke to have it come back to haunt you later.

I'm glad you decided to join us online. I too had never done anything online until only a couple of weeks ago; and now I am a forum hog (sorry). This place has saved my sanity, and (I hope to be able to say very soon) my daughter's home.

Post us again with news of how many other people you were able to tell about the 2MP option. and how it worked for them.

Regards,

Tarin
 

joeinchicago

LoanSafe Member
Mar 9, 2012
6
0
0
Chicago, IL
re: Second Lien Modification Program (2MP) with CitiMortgage

My recent experience with attempting to modify my 2nd Mortgage through CitiMortgage (on 03-07-12):

My main mortgage (with CitiMortgage) had been modified though HAMP in May of 2010 to a much lower interest rate.
I am very thankful for this. But I also have a Home Equity Loan (also with CitiMortgage) which is a fixed 6.99% that I am now also trying to get modified. From what I am reading, an offer to modify this 2nd lien loan should have been made after the initial loan had been modified. That did not happen. So I have literally struggled to pay both loans on time for the past few years. The interest alone on the 2nd mortgage is over $550 monthly!

From what I have read online in the following link, I meet all of the requirements:
Second Lien Modification Program (2MP)

I am not delinquent, have not been late and am not behind. And like many homeowners, I am dramatically underwater on the home since the crash in '08. The home values in the area have been sinking even lower rather than rising.

So....I go into my lender (Citibank) the other day (because the makinghomeaffordable site specifically says to begin with the lender). Take note: I have been with this bank for over 13 years, have my personal accounts, business accounts, credit card, and both mortgages with them for 13 years. I have seen so many people come and go/come and go. Nobody who works there knows me any longer. They have no idea on how to maintain a customer relationship. The Citibank mortgage rep. checked with their bank underwriter and they told me that modifying the 2nd mortgage was easy and that "this one will be a slam dunk". We began the application process together online. I submitted my income info. and when the underwriter had accessed my credit report, they denied me because my income to debt ratio was too high EVEN THOUGH MY ACTUAL CREDIT RATING IS VERY GOOD (758)! I haven't been late on anything and am up to date. So of course now my credit rating will go down because I was denied a loan. Now keep in mind that I brought in all of the print outs from the making homes affordable web site specific to the 2MP program. I thought he understood and I thought that that was what we were doing! This was a big mistake.

You may have skipped to this part right?.....
The next day, I called the number from the making homes affordable website. They said I had to speak with a Financial Adviser first and that they were all busy. So I made a phone appointment for the next day. They never called. So I called them again. I got a very nice women who helped me somewhat (Sr.Certified Credit and Foreclosure Prevention Counselor from Springboard Non-Profit Consumer Credit Management). I was on the phone with her for 3 hours. She provided advice and she kept me on the phone while she attempted to get in touch with CitiMortgage to assist me in the process of getting my 2nd Mortgage Loan modified. We spent the next hour getting thrown from one department to the other -all giving us a variety of different phone numbers. They had no clue on how to help. Nobody understood what we were trying to do and it was very obvious that no one at CitiMortage really wanted to help. They were very quick to transfer us somewhere else. When we finally got the right department, we were disconnected. I wished that I had videoed this whole experience and put it up on YouTube. The Financial Adviser could not believe what just happened.

The next day, I called around myself and had the same experience until I did get someone who knew a little something about the 2MP Program at Citibank. She looked up my original loan modification and said she would send in a request for reviewing my 2nd lien/loan modification and to call back in a week.

So that is where I am at. I am willing to pay the loan. I just cannot afford the 6.99% interest and am in fact on a path to possibly defaulting. I'd settle for 3.5%.....1% would be even better. Extinguishing this loan would be God sent!

I wished that Citibank and CitiMortgage could see this thread. Just maybe they would be more attentive to long term customers.

I am hoping for the best but in all honesty, like many others out there, I am loosing hope. That actually what the banks want. I will most likely have to go to an attorney who specializes in this. My friends did. And they are getting results!

If anyone has any useful suggestions that I could use in this process, please post. There must be more folks like me out there.

Thanks!
 

Cat Damiano

Mortgage Wars
Sep 10, 2007
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Colorado
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Hi Joe,


Welcome to the forum and thank you for joining.............


Citi executive team does help us on the forum with their customers, and they do watch the threads. You can also reach out to them and put a link to this thread so that they can see what has been going on with your second lien.

They can be reached here;

Michael Cardace
[email protected]

Frank Eliason
[email protected]
 

Cat Damiano

Mortgage Wars
Sep 10, 2007
10,541
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48
Colorado
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Yes, and be sure to let them know what you are going through and include a link to this thread along with your screen name so that they know you are a member of LoanSafe. They have been able to help many members here on the forum.
 

silverwesoke

LoanSafe Member
Jan 5, 2011
48
0
0
Wonder if anyone can tell me about if /how the 2 MP program would apply to someone after a BANKRUPTCY? After a bk there is no longer a second mtg note, but there is still has a second mtg lien on the property..

There would be no mortgage to modify, only a removal of the second lien possible I assume. Has anyone every seen how the 2 MP program works in this situation? Assuming of course , the first mtg has already been modified. This is my situation.. Thanks for any info ! PS BOA is my bank.
 

Cat Damiano

Mortgage Wars
Sep 10, 2007
10,541
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Colorado
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silverwesoke,


Most members that are in a similar situation and want to keep their property have been working on the settlement strategies once there first lien is permanently modified, since as you pointed out you are no longer personally liable for the debt.

http://www.loansafe.org/forum/debt-settlement/37996-strategy-settling-your-2nd.html

The HAMP 2MP process doesn't address the fact of someone that has already gone through a bk, but rather someone that is in active bk as they have to word the documents differently.
 

silverwesoke

LoanSafe Member
Jan 5, 2011
48
0
0
Yes thank you Cat..I also saw that the guidelines only address the issue when someone is in active BK..Thats why I posted the question I wonder what rules they follow for this situation , if any.
 

Cat Damiano

Mortgage Wars
Sep 10, 2007
10,541
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Colorado
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There aren't any guidelines in place for this situation. Was the first lien modified after the bk discharge?
 

Cat Damiano

Mortgage Wars
Sep 10, 2007
10,541
39
48
Colorado
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Maybe you will be one of the lucky members that have reported receiving the fully extinguished second lien letter.
 

Cat Damiano

Mortgage Wars
Sep 10, 2007
10,541
39
48
Colorado
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((((Fingers Crossed)))) Good Luck! I do hope that you will be posting exactly that!
 

coastal

LoanSafe Member
Jun 11, 2012
1
0
0
51
I have just received an Extinguishment Agreement from GMAC Mortgage. My initial reaction was WOW! I've finally received the break I need. But then my doubting self takes over. Is this Agreement for real? Or am I getting scammed into something that I'm overlooking in the paperwork. Can anybody tell me what this Agreement is and is it leggit??
Thanks!
Amy
 

TomEason

LoanSafe Guide
Jun 18, 2009
12,390
85
48
SF Bay Area CA
I have just received an Extinguishment Agreement from GMAC Mortgage. My initial reaction was WOW! I've finally received the break I need. But then my doubting self takes over. Is this Agreement for real? Or am I getting scammed into something that I'm overlooking in the paperwork. Can anybody tell me what this Agreement is and is it leggit??
Thanks!
Amy
Hi Amy

Thanks for your post and for joining Loansafe.

It sounds as if you've received an Extinguishment 2MP from GMAC. If that's the case, congratulations! Although I've seen some posted on the site, most, if not all, have heretofore been from either Chase or Citi.

It would appear you're one of the lucky few!

If you determine it's legitimate, would you mind posting your story here? Thanks and good luck!

http://www.loansafe.org/forum/debt-settlement/40564-success-stories-settling-2nds.html
 

Cat Damiano

Mortgage Wars
Sep 10, 2007
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Colorado
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marimar

LoanSafe Member
Jul 19, 2011
17
0
1
California
Hello,

Like everybody else in this thread, I also received a Dodd-Frank Certification from CitiMortgage (2nd mortgage). The letter states:

"As part of your participation in the federal government Home Affordable Modification Program with your first mortgage, your second mortgage may be eligible to be closed. This means that if you qualify, your second mortgage debt will be forgiven. In order for us to to review your eligibility, please fill out and sign the enclosed Dodd-Frank Certification and send back to us.

This deadline is real - don't risk being dropped from this chance to close your second mortgage."

Before I sign and send it back to them, I'd like to ask everyone's thoughts as I came up with the following questions:

1) Why is Citi offering me this when all my debts were already discharged through BK7? My 1st mortgage (Sallie Mae) was permanently modified way after the discharge.
2) What are the qualifications for loan closure?
3) If the 2nd mortgage is closed, is the lien considered released automatically?
4) Are there any fees associated with this procedure?
5) Are there any tax consequences tied up to this process, if any?

Thanks for your time, everyone and congrats to those who had their 2nd mortgages extinguised.