Advice On Citimortgage Modification Request Happening Now

hoodoo

LoanSafe Member
Mar 1, 2010
16
0
1
Hello Moe,

I previously posted on this thread: http://www.loansafe.org/forum/threads/anyone-still-have-an-interest-only-loan-with-citi.88862/

I wanted to start a new thread to ask what you think of my current situation. As described in the other thread, our first mortgage just reset from interest only to a standard 20 year fixed loan. Interest rate is still 4%. It was modified in 2010 to this interest rate. Now I have started working with Homeowner's Support at Citimortgage to obtain a new loan modification as payments have increased by $1600 per month.

The house value is between 21% - 25% BELOW the balance of the first mortgage, so definitely underwater!

My question is about the best approach to getting a good loan modification. Payment will be reported as unpaid to credit bureaus if not paid by May 31st. My thinking is that it's better to not make the payment and just take the credit hit if the loan modification is not done by then. There is an escrow account tied to the payment for taxes and insurance. The next tax payment is due June 1st, but there is plenty of money is the escrow account for them to make that payment. The tax payment won't be due until mid September. We don't have a lot of cash on hand, and we have already taken a 401K loan, so I don't want to over leverage ourselves, beyond what we have already done.

Does it sound like a good idea to just not pay until we get a loan modification deal?

Do you have any other advice?

Thank you for your help!
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
Aug 10, 2007
26,841
466
1,000
48
Southern California
www.loansafe.org
Hello hoodoo,

99.5% of the thousands of loan modifications I have seen over the years have been when the homeowners is late. If you are not late, they will probably not help you because you are not a risk loss for them and there will be no reason to mitigate the loan. With that said, if it is too much for you to afford and you will be late anyways, might as well be late now and start playing the loan mod game with your servicer.

There is really no set approach to obtaining a loan modification other than preparing mentally for a long drawn out fight and to be patient through the process. I recommend you read my article on loan modifications at this link: http://www.loansafe.org/loan-modification
 

kingofsting

LoanSafe Member
Jun 15, 2017
3
0
1
50
Moe,

Thanks for the feedback. I do know that I need to either settle or do a loan modification. Right now, I'm paying $2,400/mo, with about $1950 of that being principal and interest and the rest taxes and insurance.

I owe about $340k if you combine both the 1st and 2nd. It seems that I could get a single loan that could potentially cost less. I'm just wondering if this is a possibility?

Should I try and settle first or do a loan mod with Citi and then look for a single mortgage option? I could potentially put some cash down against the principle as well to lower the balance.
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
Aug 10, 2007
26,841
466
1,000
48
Southern California
www.loansafe.org
Hello,

You are welcome.

A rate and term refinance is definitely a possibility as long as you have some equity. What is your home worth?

A loan modification is just like a refinance but without the costs so it "can be" better in some cases as if you get a loan modification at 2-4% for 30 years. Many loan mods are fixed for 5 years.

In my opinion, I would settle and then go for a loan modification. But unless you are late, then you will most likely be denied and if go late hoping for a loan mod and it does not come through, then a refinance is out of the question.