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.
Thanks for your post. I recommend you seize this offer post haste, as full extinguishments aren't common.
I'm answering just one question (the others can readily be answered by Citi and your tax person.
1) Although your debt was discharged in your BK, the lien remains and eventually, when your property appreciates enough that your Citi loan is clearly "in the money", Citi could FC. Hence, a full extinguishment is very meaningful.