Citi...stopped Paying 2nd...need Advice!

Foret

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Feb 2, 2016
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I desperately need need help/advice!

My house is in Montgomery County, Maryland. My 1st mortgage is with Chase ($277,822.53; 6.25%) and the 2nd is Citi (61, 572.50; 8.25%). The Zillow estimate of my house is currently $268,770. The estimate of the appraisal Citi sent me shows the following: market value of ($272,100) and total assessed value of $223,633. Following TomEason’s strategy, I stopped paying my 2nd mortgage in October 2015. I am still current on the 1st and continues paying that one.

Citi started calling daily and I ignored all the calls as advised in this thread. They sent 2 applications for hardship assistance that I ignored. It turns out that they finally assigned my case to a Support Specialist who called me yesterday and I picked up not knowing the call was from Citi. I informed her right away that I am not looking for loan modification, but would like to settle. Her tone changed and she started pushing for details for my financials. When she realized that I would not give any info, she became rude and threatened that Citi would never agree to settle unless I provided my income and filled out paperwork. Also yesterday, I received a package from Citi providing details of an appraisal they did on my house.

Both of these 2 things (the specialist call & the appraisal) happening yesterday took me by surprise! I was not expecting any quick action from Citi as I thought it would for sure take them a year or 2 (if not more). So I am freaking out and desperately need help/guidance! Did anybody get an appraisal (without asking for one)? Does it mean that they are going to sell my house? Or do a foreclosure? Sue me? What should I do? Please help!!!

Thanks in advance for any feedback!
 

Moe Bedard

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Hello,

This is common regardless of what you have planned and or they do. They just want to see the value of the home so they can make the best financial decision with whatever they decide to do.

There are no guarantees even if you follow Tom Eason's advice. Anything can happen, but when you are underwater, the 2nd would be foolish to foreclose because they would get nothing and have to pay to foreclose. It makes no financial sense.

In the same breathe, they are not just going to roll over and give you everything you want. This is a game. Like poker but with a mortgage. You need to relax and just follow the strategy. I know it is easier said than done, but it is what you need to do if you want the winning hand.
 
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PatZZ

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Jan 30, 2011
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I desperately need need help/advice!

My house is in Montgomery County, Maryland. My 1st mortgage is with Chase ($277,822.53; 6.25%) and the 2nd is Citi (61, 572.50; 8.25%). The Zillow estimate of my house is currently $268,770. The estimate of the appraisal Citi sent me shows the following: market value of ($272,100) and total assessed value of $223,633. Following TomEason’s strategy, I stopped paying my 2nd mortgage in October 2015. I am still current on the 1st and continues paying that one.

Citi started calling daily and I ignored all the calls as advised in this thread. They sent 2 applications for hardship assistance that I ignored. It turns out that they finally assigned my case to a Support Specialist who called me yesterday and I picked up not knowing the call was from Citi. I informed her right away that I am not looking for loan modification, but would like to settle. Her tone changed and she started pushing for details for my financials. When she realized that I would not give any info, she became rude and threatened that Citi would never agree to settle unless I provided my income and filled out paperwork. Also yesterday, I received a package from Citi providing details of an appraisal they did on my house.

Both of these 2 things (the specialist call & the appraisal) happening yesterday took me by surprise! I was not expecting any quick action from Citi as I thought it would for sure take them a year or 2 (if not more). So I am freaking out and desperately need help/guidance! Did anybody get an appraisal (without asking for one)? Does it mean that they are going to sell my house? Or do a foreclosure? Sue me? What should I do? Please help!!!

Thanks in advance for any feedback!
I know it's frustrating, but there is no way anyone knows what's in the mind of Citi - except for Citi. All anyone can do is guess.

I find it odd that Citi sent you information about them doing an appraisal. Was it a full-fledge appraisal or a BPO? And what do you see was the purpose of them sending it to you? Sending it to you is even more unusual. If it was a BPO, then it could be meaningless in the short run. They do those all the time - probably because they can profit by billing us the cost. I have a host of BPOs on my record. I don't think the person calling means anything necessarily. They will call about the debt. Nothing weird about that.

And don't read much into their titles. After all, Bozo the Clown can be a VP at a servicer, so "Specialist" could be equivalent to a dog-catcher.

I am not familiar with procedures in MD, except that it is mostly non-judicial. So, do some research into MD foreclosures. And do some specific research into Citi Foreclosures in MD. That should help. Knowledge will calm you.

My 2nd mortgage lender became active with me for a minute about 4 yrs ago. Haven't heard from them since. Everybody's situation is different.

What do you mean when you say, "Do you think I stand a chance and should I continue?" Continue what?
.
 
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PatZZ

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@@Foret

Just wanted to add it's impossible to have a bonafied appraisal if no one ever entered your home. And if you do not see the name, address and license number of an appraiser on the doc, then it's a BPO
.
 
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PatZZ

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Oh, as Moe stated, the 2nd lender will NOT foreclose in your underwater situation. If that's your only worry, you can sit back & have a celebratory drink tonight. And if they did the BPO, they now know a foreclosure is out of the question. Still no need to send you a copy. NEVER heard of that.
.
 
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Foret

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Feb 2, 2016
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Oh, as Moe stated, the 2nd lender will NOT foreclose in your underwater situation. If that's your only worry, you can sit back & have a celebratory drink tonight. And if they did the BPO, they now know a foreclosure is out of the question. Still no need to send you a copy. NEVER heard of that.
.
Hello,

This is common regardless of what you have planned and or they do. They just want to see the value of the home so they can make the best financial decision with whatever they decide to do.

There are no guarantees even if you follow Tom Eason's advice. Anything can happen, but when you are underwater, the 2nd would be foolish to foreclose because they would get nothing and have to pay to foreclose. It makes no financial sense.

In the same breathe, they are not just going to roll over and give you everything you want. This is a game. Like poker but with a mortgage. You need to relax and just follow the strategy. I know it is easier said than done, but it is what you need to do if you want the winning hand.
Moe - Thank you so much for your re-assuring words! I will try to relax as you said, but this is VERY nerve wracking! Citi sent another email today saying their executive response team has assigned a different support specialist to my case, so I am waiting for the call. I am sure they will push for my financials again; which I do not want to disclose.
 

Foret

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Feb 2, 2016
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Oh, as Moe stated, the 2nd lender will NOT foreclose in your underwater situation. If that's your only worry, you can sit back & have a celebratory drink tonight. And if they did the BPO, they now know a foreclosure is out of the question. Still no need to send you a copy. NEVER heard of that.
.
Hi PatZZ,

Thank you for the reply and the details! Reading your reply along with Moe's helped calm me down a bit.

I did not know what a BPO was, so I looked it up when I saw your reply. I looked over the appraisal they sent me and it says it's produced by an "Automated Valuation Model from Freddie Mac's Proprietary Home Value Explorer (HVE)" and "An HVE point value is not an appraisal and was not prepared by a certified or licensed appraiser". So it seems to be automated and I can't figure out why they sent to me.

The so called specialist I spoke with 2 days ago did not even know about it until I mentioned it. Then she said it's proof that Citi is thinking of either doing a foreclose or a short sale even if my house is underwater. She claimed that the lawyers are the ones who will decide how much money Chase vs. Citi would get from the sale; and that it does not matter if both the 1st and 2nd are under water.

As for my previous question, I was asking if I should continue playing this game with Citi or cave in by paying the money I owe them. I do not want to lose my house, but I also do not want continue paying through my nose. I do not qualify for HARP or any other type of modification: I had tried several times with both Chase and Citi who both turned me down after I provided my financials. I feel this is my only option, although I am very scared.
 

PatZZ

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Hi PatZZ,

Thank you for the reply and the details! Reading your reply along with Moe's helped calm me down a bit.

I did not know what a BPO was, so I looked it up when I saw your reply. I looked over the appraisal they sent me and it says it's produced by an "Automated Valuation Model from Freddie Mac's Proprietary Home Value Explorer (HVE)" and "An HVE point value is not an appraisal and was not prepared by a certified or licensed appraiser". So it seems to be automated and I can't figure out why they sent to me.

The so called specialist I spoke with 2 days ago did not even know about it until I mentioned it. Then she said it's proof that Citi is thinking of either doing a foreclose or a short sale even if my house is underwater. She claimed that the lawyers are the ones who will decide how much money Chase vs. Citi would get from the sale; and that it does not matter if both the 1st and 2nd are under water.

As for my previous question, I was asking if I should continue playing this game with Citi or cave in by paying the money I owe them. I do not want to lose my house, but I also do not want continue paying through my nose. I do not qualify for HARP or any other type of modification: I had tried several times with both Chase and Citi who both turned me down after I provided my financials. I feel this is my only option, although I am very scared.

Oops, I didn't follow my own rule - don't use acronyms unless it's clear the reader will know what it means. The AVM (automated valuation) is no better than checking zillow for a value, and no better than a BPO.

Please do not rely on ANYTHING told to you by the morons at the servicer. They are NOT professionals and they do NOT know what they are talking about. They will say ANYTHING to you, right or wrong. They do not care. Most have no idea how the mortgage business really works. But regardless, when you speak to the bufoons, it would behoove you to take good notes as to who you spoke to, the date and what they said. We never know when we might need to be able to spit back out what someone said in detail.

I am thinking that valuation was sent to you by mistake. Servicers make a ton of mistakes.

We all have to make our own choices. I would not talk to them, and that is what I did with my own loan. If you do talk to them, do not feed them ANY information - e.g., there was no need to mention that you received the valuation in the mail. Don't give up anything. Some day you might be able to use their confusion against them. I would hold out until they agree to a nice settlement. Happens all the time. But if you keep talking to them, Citi may begin to think that one day they can get you to roll over and pay. Whereas no contact means Citi doesn't stand a chance.

Her saying that the attorney might be looking at foreclosing is nothing more than a game, OR just her being a moron. Communication within a servicer's office is horrid. And even more horrid when it comes to communication between the mill and the servicer. They want to collect a debt and keeping you confused and scared is part of the plan. Don't fall for it and don't be the one to give in at the first hurdle.

And no, Citi's lawyers will not determine how much money from a sale will go to the 1st mortgage holder. In fact, it would be the opposite. Citi would get whatever crumbs are left over - which would be ZERO.
.
 
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Ready2Run

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Foret - This can be a very scary time for you, I know from experience. The comments PatZZ left for you above are right on the money. The people you are talking to on the phone have a job, their job is to get money and/or information from you that can be used to get money. The fact that you sound scared is really good information for them since people tend to get desperate when they are scared. They know this and will use anything they can against you, so don't given them any ammo.

I don't know the laws in your state but if you were in California I would know that you have nothing to worry about. Hopefully the laws in your state are similar as to the options the 2nd has. You really need to research this and make your own decisions as to if the risk (there is always risk) is worth it to you.

Three things I'd like to point out that PatZZ already talked on

1. Don't think that the lender knows what it's doing and/or the head knows what the tail is doing, if you know what I mean. The lenders make all kinds of mistakes and the poeple calling many times have no idea what the lender is doing / sending.

2. Don't talk to them, it's a waste of time. Follow the strategy the best that you can. The more you talk to them, the more they think your worried, and the less likely they are to give you a deal. My deal came about a month and a half after I had had it with them. My last words to them were basically telling the a**hole to go f**k himself and to feel free to try to sue me if he thought me could. I'm not saying to do that but after months of games I lost it and swore I wouldn't talk to them again. Luckily I didn't have to.

3. If they try to foreclose, it's very likely that they are not going to get them anything at this point since the 1st ALWAYS gets paid first, that's why they are the first. So unless under your state law they can get a judgement against you, they won't get anything. Even if they can get a judgement, you (and they) would have to look at the numbers and see if it makes sense for them to try. If they foreclose, they must first pay foreclosure costs, then they must pay off the 1st mortgage, then they can sell the property and try to recover the remaining amounts from you. Basically (from your numbers) they would need to invest a minimum of $280K+ in hopes of getting their $61.5K+ back. That's not a smart move and they know it.
 

Foret

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Ready2Run and PatZZ

I can't thank you enough for your detailed and swift replies! I feel so MUCH better! Thank you so much for going out of your way to explain all of this to a stranger!

I will follow your advice and stop talking. I need to work on my nerves and stop panicking. Truth is that part of me still can't believe that I am finally doing this. I have been reading your replies in other forums to learn more and it has been helping. From what I have been able to piece together from your respective situations, this is going to be a very long game!

You are also both right: I need to educate myself! I am going to do research on the laws in MD to know what I am up against. The one thing I am most worried about is losing my house, but it seems that will not happen based on what you both explained as it would be stupid for Citi to attempt foreclosure.

Praying for the best for all of us!
 

mickandvick

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Apr 18, 2012
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Hi Moe, I was wondering if you could please give me some advice. I am about 150k -200k underwater on my first mortgage and owe 150k on my second that was with PNC. I made my last payment to PNC in December 2012. (almost 4 years ago) The second was charged off and is now with Specialized Loan Servicing who calls about once a month. I have followed the strategy for settling but they refuse to negotiate settlement without financials. I have told them that they will not receive financials from me as the loan is secured by the home and that if forclosed on, they would receive zero. I told them not to call me as I would not be responding to their call. I told them that if they are serious about settling, they could send me the offer in writing. They insist that no offer will be made without financials. They tell me that legally that can not even discuss an offer without the financials which I find amusing since they offered me a 50% offer a couple years ago. I am hoping that not taking any calls will make them become serious about settling. I live in CA and is there not a statute of limitations as to how long they can continue to call me? Can or should I send them a notice to stop calling? Have you heard of what the current % SLS is settling seconds for? Should I stick to the no financials position? They want to know if there is a stashed 401K. What business is it to them if I have a 401? The loan was secured by the home. The first was modified last year with a balloon in 20 years that allows me to stay in the home with reduced mortgage payments and no principle reduction. A lousy mod but the best BoA would do on my jumbo loan. If in the next few years the value on the first comes up, can SLS then foreclose or do anything? Thanks Moe
 

PatZZ

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Hi Moe, I was wondering if you could please give me some advice. I am about 150k -200k underwater on my first mortgage and owe 150k on my second that was with PNC. I made my last payment to PNC in December 2012. (almost 4 years ago) The second was charged off and is now with Specialized Loan Servicing who calls about once a month. I have followed the strategy for settling but they refuse to negotiate settlement without financials. I have told them that they will not receive financials from me as the loan is secured by the home and that if forclosed on, they would receive zero. I told them not to call me as I would not be responding to their call. I told them that if they are serious about settling, they could send me the offer in writing. They insist that no offer will be made without financials. They tell me that legally that can not even discuss an offer without the financials which I find amusing since they offered me a 50% offer a couple years ago. I am hoping that not taking any calls will make them become serious about settling. I live in CA and is there not a statute of limitations as to how long they can continue to call me? Can or should I send them a notice to stop calling? Have you heard of what the current % SLS is settling seconds for? Should I stick to the no financials position? They want to know if there is a stashed 401K. What business is it to them if I have a 401? The loan was secured by the home. The first was modified last year with a balloon in 20 years that allows me to stay in the home with reduced mortgage payments and no principle reduction. A lousy mod but the best BoA would do on my jumbo loan. If in the next few years the value on the first comes up, can SLS then foreclose or do anything? Thanks Moe

Just wanted to ask you if your 1st gave you any problem with the mod given that you had a recorded second. In many states, it can be a problem because the 1st has to record the loan mod, but they want to remain in first place - meaning the 2nd would have to agree to subordinate.

Was this ever an issue for you?
.
 

mickandvick

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Apr 18, 2012
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Just wanted to ask you if your 1st gave you any problem with the mod given that you had a recorded second. In many states, it can be a problem because the 1st has to record the loan mod, but they want to remain in first place - meaning the 2nd would have to agree to subordinate.

Was this ever an issue for you?
.
Just wanted to ask you if your 1st gave you any problem with the mod given that you had a recorded second. In many states, it can be a problem because the 1st has to record the loan mod, but they want to remain in first place - meaning the 2nd would have to agree to subordinate.

Was this ever an issue for you?
.
No I didn't have any problem with the first or second when I received the in house mod from BofA. I live in CA and there was no problem getting the mod once my husbands employment ended and income was cut 50%.
 

PatZZ

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No I didn't have any problem with the first or second when I received the in house mod from BofA. I live in CA and there was no problem getting the mod once my husbands employment ended and income was cut 50%.
Thx for responding. Every state can be different. Perhaps in CA, the mod need not be recorded OR if it is recorded, it still maintains its place position.

I'm battling this problem now with my servicer. I have 2 other mortgages after my first. The 3rd mortgage just settled with me for an unbelievably small amount. Now waiting to see what my 2nd will do. A couple lawyers in my state have told me that there really is no reason why the mod need be recorded at all because the original recorded mortgage gives the lender the right to collect what is owed regardless. Most want to record it as some sort of safety net. Does make sense.
.
 

bkakca

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Jul 5, 2013
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Oops, I didn't follow my own rule - don't use acronyms unless it's clear the reader will know what it means. The AVM (automated valuation) is no better than checking zillow for a value, and no better than a BPO.

Please do not rely on ANYTHING told to you by the morons at the servicer. They are NOT professionals and they do NOT know what they are talking about. They will say ANYTHING to you, right or wrong. They do not care. Most have no idea how the mortgage business really works. But regardless, when you speak to the bufoons, it would behoove you to take good notes as to who you spoke to, the date and what they said. We never know when we might need to be able to spit back out what someone said in detail.

I am thinking that valuation was sent to you by mistake. Servicers make a ton of mistakes.

We all have to make our own choices. I would not talk to them, and that is what I did with my own loan. If you do talk to them, do not feed them ANY information - e.g., there was no need to mention that you received the valuation in the mail. Don't give up anything. Some day you might be able to use their confusion against them. I would hold out until they agree to a nice settlement. Happens all the time. But if you keep talking to them, Citi may begin to think that one day they can get you to roll over and pay. Whereas no contact means Citi doesn't stand a chance.

Her saying that the attorney might be looking at foreclosing is nothing more than a game, OR just her being a moron. Communication within a servicer's office is horrid. And even more horrid when it comes to communication between the mill and the servicer. They want to collect a debt and keeping you confused and scared is part of the plan. Don't fall for it and don't be the one to give in at the first hurdle.

And no, Citi's lawyers will not determine how much money from a sale will go to the 1st mortgage holder. In fact, it would be the opposite. Citi would get whatever crumbs are left over - which would be ZERO.
.
Hi Patzz, BofA sent us an AVM on our home before Christmas. It should clearly show them we are underwater by $50K according to their AVM, plus foreclosure costs. Yet we have a Trustee Sale Date scheduled for April, certified letters received, as well as the one posted on the door, and recorded in the County Recorder. Oh well, we'll see what happens.

We had made one offer to settle at about 8% back in November. Probably shouldn't have, but the Heloc is much larger than our 1st mtg. Told us we needed to send in our financials with the Borrower Response Package filled out. Told them we settled two Helocs with them in 2014 with no financials, for around 7.5%. Nothing since November except the Notice of Trustees Sale. Idiots.
 

PatZZ

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Hi Patzz, BofA sent us an AVM on our home before Christmas. It should clearly show them we are underwater by $50K according to their AVM, plus foreclosure costs. Yet we have a Trustee Sale Date scheduled for April, certified letters received, as well as the one posted on the door, and recorded in the County Recorder. Oh well, we'll see what happens.

We had made one offer to settle at about 8% back in November. Probably shouldn't have, but the Heloc is much larger than our 1st mtg. Told us we needed to send in our financials with the Borrower Response Package filled out. Told them we settled two Helocs with them in 2014 with no financials, for around 7.5%. Nothing since November except the Notice of Trustees Sale. Idiots.

Just seeing this. Your case may be the only one like it on this forum. Don't recall anyone saying the 2nd foreclosed when the first is so underwater. I wonder if they are calling your bluff.
You must be in a non-judicial state. And one thing's for sure. In a non-judicial state, it would be very easy (and cheap) to get to a sale, vs a judicial state where we have to go through a whole court process.

I'm still wondering what's the purpose of sending the homeowner a copy of the valuation. I've never seen any of mine.
.
.
 

Foret

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Feb 2, 2016
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Hi All! There is an update on my case and I need advice again! Last week on Feb 25, I emailed a settlement offer to City. I used one of the formats I found on this forum (posted by Maurice). I offered $6K to settle the $61.5K loan. Today I received the following email from CitiMortgage:

“Your file has been noted concerning the charge off of your account and you have been instructed that, going forward, you must confer with Citimortgage’s Recovery Division at 800-395-8897 for further assistance.”

What does this mean? Is “charged off” a good thing or a bad thing? Does this mean that they can now sue me or foreclose? Any advice on what I should do? I am trying hard not to freak-out and I am anxiously waiting for feedback! Thanks in advance!
 

PatZZ

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Jan 30, 2011
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Hi All! There is an update on my case and I need advice again! Last week on Feb 25, I emailed a settlement offer to City. I used one of the formats I found on this forum (posted by Maurice). I offered $6K to settle the $61.5K loan. Today I received the following email from CitiMortgage:

“Your file has been noted concerning the charge off of your account and you have been instructed that, going forward, you must confer with Citimortgage’s Recovery Division at 800-395-8897 for further assistance.”

What does this mean? Is “charged off” a good thing or a bad thing? Does this mean that they can now sue me or foreclose? Any advice on what I should do? I am trying hard not to freak-out and I am anxiously waiting for feedback! Thanks in advance!
A charge off is nothing more than an accounting term. It has nothing to do with whether the bank will foreclose. It's what all creditors will do when a debt goes unpaid for 6 to 9 months. Sometime later, it often goes to a collection agency.

I thought people didn't even attempt to settle until some time after a charge-off. My bank didn't offer me anything below 50% until more than 2 years had passed after my last payment.

Don't forget that if you are aching for a factual answer, just go to google. Typing your question in google brings up an answer probably 90% of the time with a mere 1 second wait time. Do some research into credit and debt collection so you'll feel more comfortable.
.
 

Foret

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Feb 2, 2016
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A charge off is nothing more than an accounting term. It has nothing to do with whether the bank will foreclose. It's what all creditors will do when a debt goes unpaid for 6 to 9 months. Sometime later, it often goes to a collection agency.

I thought people didn't even attempt to settle until some time after a charge-off. My bank didn't offer me anything below 50% until more than 2 years had passed after my last payment.

Don't forget that if you are aching for a factual answer, just go to google. Typing your question in google brings up an answer probably 90% of the time with a mere 1 second wait time. Do some research into credit and debt collection so you'll feel more comfortable.
.
As always thank you PatZZ for the quick response! I was a bit spooked by the "charge-off" as I didn't know what it was! Thank you for explaining. Taking your advice, I have been spending a lot of time since yesterday on the internet educating myself. It's amazing how many of he results on Google come directly from this forum. This is obviously the right place to be!
 

PatZZ

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As always thank you PatZZ for the quick response! I was a bit spooked by the "charge-off" as I didn't know what it was! Thank you for explaining. Taking your advice, I have been spending a lot of time since yesterday on the internet educating myself. It's amazing how many of he results on Google come directly from this forum. This is obviously the right place to be!
I must say that was a fast charge-off. . Just barely 5 months since your last payment?
.