Old Citi 2nd mortgage help

Crickee

LoanSafe Member
We had a 2nd mortgage with Citi that was charged off and settled with over 8 years ago. In 2015 we had a flooding incident in our basement where my records were kept and this settlement documentation was destroyed and the bank we were dealing with at the time has since closed.

We are refinancing our 1st mortgage and 7 days before closing they found a 2nd mortgage lien from Citi. This 2nd mortgage lien isn’t listed with the county property records and was dropped from our credit reports at settlement.

Our refinance mortgage rep sent a lien release and Citi came back and said it’s not paid. We were given a phone number for Citi customer service. The settlement was through Alliance and makers me think that they didn’t notify Citi. I’m almost afraid to call to find out in case they want the original amount before settlement which was around $14,000. Any advice? Has anyone experienced this?
 

Crickee

LoanSafe Member
I forgot to add we got a 2nd mortgage in 2018 (paid in full in 2019) with our local credit union and this Citi lien was never mentioned in the title search.
 

Jzone

LoanSafe Member
We had a 2nd mortgage with Citi that was charged off and settled with over 8 years ago. In 2015 we had a flooding incident in our basement where my records were kept and this settlement documentation was destroyed and the bank we were dealing with at the time has since closed.

We are refinancing our 1st mortgage and 7 days before closing they found a 2nd mortgage lien from Citi. This 2nd mortgage lien isn’t listed with the county property records and was dropped from our credit reports at settlement.

Our refinance mortgage rep sent a lien release and Citi came back and said it’s not paid. We were given a phone number for Citi customer service. The settlement was through Alliance and makers me think that they didn’t notify Citi. I’m almost afraid to call to find out in case they want the original amount before settlement which was around $14,000. Any advice? Has anyone experienced this?
How was this lien discovered if its not recorded with your county?

Do you remember if you simply "settled the debt" with Citi or if the lien was to be released as part of the settlement? Some companies will purposely not put "release of lien" in the settlement paperwork so the lien remains.

Liens are generally not listed on a credit report, just the debt. It sounds like Citi sold your debt to Alliance when you stopped paying since you said the settlement was with Alliance.

I would start re-creating the paper trail. Contact Citi and ask for proof of debt. If they are saying its not paid, ask them for the paperwork. Then contact Alliance and ask for paperwork. I dont know how this escaped being found in your 2018 mortgage, but now it has to be dealt with. Hopefully, it's just Alliance failing to file the release of lien.
 

Crickee

LoanSafe Member
The lien was found in a title search by the mortgage company we are doing a refinance through. They did say it’s not listed in the property record at our courthouse. It’s all very bizarre since we did an equity loan in 2018 and it wasn’t mentioned.
 

Jzone

LoanSafe Member
The lien was found in a title search by the mortgage company we are doing a refinance through. They did say it’s not listed in the property record at our courthouse. It’s all very bizarre since we did an equity loan in 2018 and it wasn’t mentioned.
In most states, the lien must be recorded with the county to be valid. So that may be one direction to take.
You may also need to file a quiet title action or quit claim deed. Both remove clouds on titles but do so differently.

A quit claim deed gives away a persons right to property. You are saying, "I'm not sure what rights I have in this property, but whatever they are, I give to you". It's a quick and inexpensive document recorded with the county. Cost is usually less than $100.

A quiet title action takes away rights to property and is decided by a judge. You are saying " I own this property and anyone else who thinks they have any rights to it, must provide evidence". This can cost $2000-$3000 and take 6 months to complete. A judge reviews all claims and makes a decision. Any clouds on the title are cleared and recorded with the county.

Your title search company should be sharing the information on how they found the lien.
 

Crickee

LoanSafe Member
Update, I went to the county records and the original Citibank 2nd lien from 2007 is still listed and I printed a copy for our records. Citi has no knowledge of a settlement agreement we did with Alliance but was put towards the balance which is $12,500. Alliance can’t locate the account so I just want this all to.be over with.

I offered a 5% settlement to Citi this week. They declined my offer since I didn’t send paystubs, bank statements and tax returns as requested. I really don’t want to send any of the info since my paystubs are really inflated due to working 65 hour weeks since September. My hours went back to normal in March but that won’t show until my April 30 paystub (I’m paid monthly). Do I just give in and send the docs?

I don’t think they can sue or garnish wages due to Virginia’s 6 year statute of limitations for charged off promissory notes which I learned in my research. Can anyone verify this? If yes, this might help me with the negotiation.

Also in 2018 Mr. Cooper took over the servicing of our 1st mortgage from Citimortgage. Does this mean Citimortgage actually sold the 1st mortgage to Mr. Cooper? This is what I had initially understood. If yes, then isn’t that another point to make in settling the 2nd since we’ve never been behind on our 1st?

I also forgot to mention that the Citi 2nd mortgage charge off account and the Alliance account was removed entirely from our credit reports in 2015 after a credit report dispute.

I’m looking for any suggestions at this point. Thanks!
 
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