I have worked with Citi Mortgage on short sales for over 4 years now, and I have always considered them to be one of the best banks to work with in regards to short sales. They have a fairly quick turn around time (ave. 40 days), they have a decent loss mitigation system in place and issue excellent approval letters for a short sale where they clearly release sellers of any deficiency and of having to pay any of the shortage back. But they are starting to change the way they do things and becoming more aggressive and DO plan on collecting on some short sale clients.
In the past when someone had loan that they were not making payments on and wanted to do a short sale, we would work with their loss mitigation department until the transaction was completed. In some rare cases when the account was past do, over 6 months, they would send the file off to their Recovery Department. This is a completely different department then their loss mitigation division and typically are much more aggressive when arranging a short sale. We knew they typically would require at least a 10% payoff if this was a second mortgage or HELOC with no equity, but still would issue an approval letter stating they would release the seller from any deficiency. Now it seems they are moving files over to their recovery department much more quickly (within 90 days of nonpayment) and when they agree to a short sale they WILL NOT release the client from any deficiency, only the lien.
What Citi Mortgage is doing now, is they are starting to sell these loans off to collection companies who are surfacing and buying bad debt. In the beginning of this real estate meltdown, not many debt collection companies were interested in buying this bad debt or the price to buy it was too high. But as there are signs of economic stability, debt collectors are starting to buy this collectable debt more and more frequently. So if you go behind on your mortgage that is a recourse loan, Citi Mortgage is more willing to move your loan over to this Recovery Department much more quickly. We have been told by Citi Mortgage representatives that at 90 days late, it is eligible to be move to the Recovery Department.
Once your loan is in the Recovery Department, they will still allow you to do a short sale, but only issue an approval letter stating they are releasing the lien, which leaves the account open to be sold off to the debt collectors who will pursue the sellers for any money they can.
So what can a short seller do? Well, many of the Citi Mortgage representatives are telling homeowners to make a payment which will keep it out of the recovery department for another 30 days. This may allow some time to get a short sale approved with their traditional approval letter. Could this be a tactic by CitiMortgage to get more money from a home owner? Possibly, but I can verify that I have personally seen this happen on several accounts. We obtained a great approval letter releasing the seller from any deficiency, and then maybe the buyers cancelled, and when we went back to the bank with another offer, the account went to the Recovery Department and we got a totally different approval letter, so we know this is in fact happening. If a home owner does not have any money to make a payment then the only option may be to start the short sale process as soon as possible once a payment is missed. If the loan is a recourse loan, or possibly a second mortgage with no equity position, and the first forecloses, there is still no relief from them selling this off to debt collectors or from the home owners having to pay this money back. Other options might be to hire an attorney to negotiate with the banks (and we do work with experienced real estate negotiating attorneys), or consider other options such as bankruptcy which would protect a homeowner from having to pay this money back. The growing trend seems to be that banks are still allowing sort sales, but more and more they are not releasing any deficiencies for the seller and plan on selling of this bad debt to collection companies.
Kurt Wannebo
San Diego Real Estate and Investments
www.shortsaleinsandiego.com
CitiMortgage is playing a great “Poker Game” and trying to squeeze the last possible penny out of our government, the borrowers AND the investors. They are a self-serving banking whore that is milking this country dry.
This is NOT about people getting a bunch discounts on their homes. 60 million securitized mortgages in this country are presumably predatory and/or unable to withstand scrutiny in a foreclosure proceeding. The notes on most of these mortgages have been destroyed and the debts are unenforceable.
It isn’t a matter of IF the nation will collapse into a depression when these mortgages fail, but a solid WHEN. People have homes that are worth fractions of what they owe. When catastrophic bank failures and foreclosures ensue, don’t expect people to continue to pay for a home who’s value is rocketing to bedrock. They can step off of their front porch and buy the neighbors home for 40% of what they owe.
THAT’S JUST COMMON SENSE
We must keep people in their homes, we must keep banks banking and we must ask Congress to ENFORCE the PROGRAMS and to flex when needed if the target moves and needs to be fine-tuned. They must act swiftly and they must hold those who consider themselves TOO BIG to be regulated to the blazing fire of justice. NOT just to remedy the existing tsunami of piracy and gluttony today, but to PREVENT IT in the future.
If we just asked people not to steal but did nothing about it when they did… well, I think you get my point. Congress is a lazy parent while the children (AIG, CitiMortgage, JP Morgan Chase, Wells Fargo…) are in the attic fearlessly playing with matches.
I urge you to join me and thousands of others and sign the American Homeowners Petition To Congress urging them to act NOW and stem the bleeding: http://www.petition2congress.com/2/2564/petition-to-us-government-from-american-homeowners/
I will say that Citi is NOT bluffing when it comes to the difference in approval letters, or the amount they will settle for between the two departments. What they do bluff with is the timeline at which the switch the file from the loss mittigation to recovery. I have seen a few different timelines implemented, but it is something I do not want to gamble with for my clients that are worried about defiecencies, and if it is a recourse loan.
Short sales have never been about discounts for buyers, they are about a mutually benefical transaction for the homeseller and lender (and agents).
While I wont comment on whether loans are predatory or enforceble, I do agree many homeowners will question why they should continue to pay on a mortgage that is substantially greater than thier assest and choose to dispose of it in some fashion.
I also agree that legislation should be put into place to protect homeowners in certain situations, from short sales that has been clearly neglected on state and federal levels.
I agree. Realtors should be negotiating on behalf of the seller and should read the approvals very carefully to make sure no deficiency will be seeked.
I have had no difficulty with Citi not seeking any deficiency….
Stephan Sabbah
360 Realty
What do you mean Citimortgage is easy to work with!!!!!!!!! I have been out of a job since April, 2009. I made payments as long as I could by depleting my IRA for retirement. I contacted them when I could not make payments anymore because I had no money to pay them. I was told to get a realtor and try to sell the condo. The realtor had a sell on the condo for what was owed on the property. The signed contract was turned into Citimortgage on Feb. 18, 2010. On Feb. 22, 2010 they foreclosed on the condo. I did not know there was to be a foreclosure the 22nd of Feb. I had not been notified. The realtor and I found out about the foreclosure when the buyer’s realtor had sent the inspector over to inspect the condo for the sale, which was a couple days after the foreclosure had happened. A realtor from another real estate company was there taking pictures of the condo and told them they could not sell the property because it had been foreclosed on.
My realtor and I both called citimortgage to find out what was going on. They had kept the signed contract and did not pass it on to be processed by the bank. The bank would have had their money in full, but chose not to take the money. They chose to foreclose without my knowing. The closing on the sale of the condo was to be on Feb. 28, 2010 for them to get their money. I was told that the contract for the sale of the property and the other paper work was in my file and they had received it on Feb. 18th. I intend to get a lawyer and let everyone know what happened to me at Citimortgage. If I knew they were going to foreclose when they were notified there was a sale on the property, I would not have got the realtor involved and just handed it over to them. I still have alot of my things in the condo which I am trying to get. I had to move in with my oldest son, I have only been able to find a part time job that will end soon. I also intend to tell my story to everyone until I find someone who can do something about this.
Trying to find someone to help at Citimortgage is impossible. When you call you never get the same person and with each person you get a different answer. If you call back and try to get the person you talked to before, they never know who that person is and you are told no one by that name works in the office. When talking to all these people you get different answers from each of them. If you know of anyone that can do something about getting the word out on Citimortgage, please let me know. I intend to do everything I can to tell of the treatment of their clients and maybe get some help. Citimortgage is inept at working with their clients.
I am sorry to hear this happened to you, but unfortunately there should have been plenty of notifications that the property was going to sale at a foreclosure auction. They legally have to notify you and file notification with the county that you live in. The agent you were working with should have researched this and known it was coming. Ultimately its the banks choice as to whether they want to accept a short sale or postpone the foreclosure.
This is in response to Kurt’s statement regarding Citi Mortage processing of short sales.
“I have worked with Citi Mortgage on short sales for over 4 years now, and I have always considered them to be one of the best banks to work with in regards to short sales. They have a fairly quick turn around time (ave. 40 days)”
W are now approaching 8 months waiting for Citi Mortage to process a short sale that we are attempting to purchase. They are either inept as mentioned above or have an ulterior motive, it is unimaginable even with the current high volume of short sales to process, that this should have taken 8 months.
I had a short sale offer approved on my home and then it did not pass inspection…yesterday. The agent requested that Citi either reduce the accepted price or pay for the septic to be replaced so that the sellers would still want the home. Citi will not do either since they have already gone as low as they want on the price and were wanting me to pay the $4750 to fix the septic. If I had the extra money to pay for that repair then we would not be in this situation right now. Is Citi just trying to get more money out of me? If the septic is not fixed and these buyers do not buy then the house is considered unsellable and I will have to let it go into foreclosure.
When you call Citimortgage make sure you document the time you call and get the agents ID number. If you have a device to record them make sure you do this too. My home was placed in forclosure and I was told by the lawyers that were hired by Citi If I’d not been so savy and knew how to document I’d lost my home. Now I’m doing the short sale and it’s a nightmare… , but of course I’ve already filled up a notebook of documents of the conversations to cover my asss. BEWARE OF (name edited out) WITH NATIONAL QUICK SALE… This is a third party company that is helping Citi with these short sales. She is not on your side BEWARE OF NATIONAL QUICK SALE they are not trying to help you. I put $3,00.00 dollars into my house to help sell it and she went behind my back and dropped the price from 98,000.00 to 31,500.00 with my signature. The realtor was in total shock he said, I can’t believe she did that.. of course I have her recorded and a e-mail trial of all the WRONG things she did. Again BEWARE of this company.They had the nerve to ask me, “why are you so involved with this?” I said, Are you serious?, I work for a bank also I know what you are doing is wrong. She said, Well we aren’t use to the homeowner being so involved…. Nuff said. BEWARE!
Do you mind if I quote a couple of your articles as long as I provide credit and sources back to your website? My blog is in the exact same area of interest as yours and my users would definitely benefit from some of the information you present here. Please let me know if this alright with you. Regards!