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I Was Mislead by Citi Customer Service to Default on My Mortgage. – Woody

In 2009 I applied through CitiMortgage then new HAMP (five times!) but always being turned down. After a few frustrating calls, I cited that I was a very good customer (never late or default on our mortgage monthly payments since 2002) and only to get BIG surprised, same answers that my diligence in paying monthly mortgages WAS the culprit why my previous HAMP applications were ignored! I explained to Citi that I had legitimate reasons to get approved for HAMP because I am disabled from work (still now for 5 years) and my wife lost her job since early 2008 (still does); our only household income is from my SS Disability benefits which is NOT even enough to pay our monthly mortgage, let alone paying other living expenses.

After a few more calls I was led to purposefully defaulting my monthly mortgage payments by CitiMortgage Customer Service in order to get pre-qualified for HAMP they said. So from January to March 2010, for the first time ever in our life, I, basing my trust on Citi’s own advises, ON PURPOSE defaulted mortgage payments. To make the story short, Citi at the same time, side by side with HAMP they also started foreclosure proceedings on our house. All along I was again (mis-)adviced NOT to pay off my 3 months default while on HAMP process, because doing so “would kill” my application. For months Citi would ask one new/renewed document after the other, saying my file was reviewed by different groups and that “the end of the tunnel” was very near-my HAMP would get approved very soon. Citi on their website under “My Account” page for a few months, even posted their proposed “future” modified mortgage payments (with 2% APR) while on HAMP Trial periods versus my current payments (of 5.25% APR)-leaving me with the (false!) impression that my application certainly being pre-approved.

Then by October 2010 Citi scheduled public auction sale on my house, while my HAMP application going nowhere. A week before this auction sale, I decided to pay off my default payments to avoid losing my home. Along with those 3-months mortgage default payments, I was ALSO charged different junk fees (such as attorney fees, late fees, interest and overtime fees, appraisal fees, collection fees, inspections fees and others more) costing me extra $2,700+ to reinstate my mortgage account. To pay off all these, I was told and referred to deal with “Citi’s Attorneys Office”, which was “CR Title Services” a.k.a. “Five Star Service Corporation” with an address in O’Fallon, MO. Later on after my account reinstatement was done, I called this office to speak to their attorneys and only to be told that “this office has never had any practiced attorneys.” Citi lied (again!) to me, this office works for Citi as their collection agency with NO attorney working in it (false threats!).
At that time I was extremely afraid, nervous, panicked, felt greatly pressured, hopeless and defenseless, and had no other choice than paying whatever Citi charged me because the alternative was to lose my house in public auction!

IN THE FIRST PLACE, obviously I was mis-informed, mis-advised, mis-directed and mis-led BY Citi Customer Service representatives to default my monthly Citi mortgages in order to be pre-qualified on my HAMP application. In fact, those default actions ruin both my and my wife’s FICO credit scores instantly from the high around 800′s-which in turn forced me to file for Ch. 7 bankruptcy by the end of 2010! It leaves me sick, depressed & disabled without a job, sole income from SSDI that is not even enough to pay monthly mortgage and let alone to pay other living expenses, cannot get any loans or credits with low FICO scores & bankrupt, and without family (for almost two years now my wife and kid live with her parents overseas).

My questions: How to get Citi to pay back those $2,700+ extra junk fees to me on the basis that Citi IN THE FIRST PLACE led me to all these mess which otherwise would never happen? I cannot afford to hire any lawyer to defend me, can you please help and/or assist me to the end? Kudos for heroes like you guys!

I’m currently backed-up on answering questions so I’m posting some of the questions here for you to help answer.

This is your chance to be a hero and help out this person by providing your feedback and answer to the question in the comments section below.

I Was Mislead by Citi Customer Service to Default on My Mortgage.   Woody
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Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Woody

    Louis,

    Thank you for your sympathy.  As you wrote, I agree that “unless we get together and start defending ourselves thru the legal channels all we can do is complain to one another to no avail.”  Unfortunately right now I am not aware of any class action to “get together” against those unfair (to say the least IF they are not illegal) practices, neither can I afford lawyer(s) to get my money back (which in my case the damage is “only” $2,700+, about two-month worth of payment for our mortgage, a really big deal for us living on SS).

    So, for now, little victims like me can only make small noises, and hopefully when more people create enough loud roars then – and only then – someone with legal authorities could help and stop all those unfair fleecings of trapped poor folks!

  • Kim

    Louis,

    Just an FYI. I went through a mortgage modification through Bank of America. We entered into the program based on a hardship through loss of income which we were required too & provided the proper documentation. This part of the process is extremely important and necessary for them to approve the modification. It took us well over a year, and the person above is correct in their statement regarding the area you are directed for contact when calling is always! the collection department. You have to be transferred to the modification department, they Do Not and Will Not communicate between the two businesses. As far as BAC see’s it, and although they are the owners of the subsidiary, they do not communicate between them. I’m fairly certain it eliminates legal liabilities.

    However, he is incorrect in the “need to be delinquent”. You are in actuallity thrown into delinquency when you only pay your modified mortgage amount, which is sent through their LLC and then recorded on the books at the bank as an underpayment, which of course leads them to write the mortgage off the books at the bank, set it in limbo, readjust everything, and finally modify the mortgage. And realistically, it is not designed to eliminate a larger portion of the loan, or forgive any of the debt. It’s merely to put you into a slight bit more tolerable position, where you either move forward in life or default. While the new version of the note on my property is still higher than market value, which is no suprise given the state of the real estate market; there was no reduction in the actual principal, but the interest rate was reduced to 3.75 for 5 years, then it moves up to 4.25 for the remainder of the loan. It reduced my mortgage by $250 per month, which is better than nothing and helped with groceries.

    Your right in they misled you – because I was not delinquent in my mortgage, ever – with the exception of when they put me into the modification process (which was a lower payment) and they did not communicate with their parent company. The mortgage modification process is done in their BAC Home Loans, “LLC”; assumingly for the purpose of accounting, delay of the process, and the intent to scare people out of the program. If you are honest & diligent on your paperwork; proving you can atleast make the reduced payments - even by the skin of your nose, they will modify your mortgage. It may not be a great deal, but other than walking away it’s all they will offer – BUT not unless you can prove a hardship.

    I will have to say, that those that I know who have gone through the process, unethically and not being entirely honest…have gotten a much better deal. However, I am not a gambler or dishonest and I am grateful for what we did receive from the process. 

  • Kim

    Louis,

    Just an FYI. I went through a mortgage modification through Bank of America. We entered into the program based on a hardship through loss of income which we were required too & provided the proper documentation. This part of the process is extremely important and necessary for them to approve the modification. It took us well over a year, and the person above is correct in their statement regarding the area you are directed for contact when calling is always! the collection department. You have to be transferred to the modification department, they Do Not and Will Not communicate between the two businesses. As far as BAC see’s it, and although they are the owners of the subsidiary, they do not communicate between them. I’m fairly certain it eliminates legal liabilities.

    However, he is incorrect in the “need to be delinquent”. You are in actuallity thrown into delinquency when you only pay your modified mortgage amount, which is sent through their LLC and then recorded on the books at the bank as an underpayment, which of course leads them to write the mortgage off the books at the bank, set it in limbo, readjust everything, and finally modify the mortgage. And realistically, it is not designed to eliminate a larger portion of the loan, or forgive any of the debt. It’s merely to put you into a slight bit more tolerable position, where you either move forward in life or default. While the new version of the note on my property is still higher than market value, which is no suprise given the state of the real estate market; there was no reduction in the actual principal, but the interest rate was reduced to 3.75 for 5 years, then it moves up to 4.25 for the remainder of the loan. It reduced my mortgage by $250 per month, which is better than nothing and helped with groceries.

    Your right in they misled you – because I was not delinquent in my mortgage, ever – with the exception of when they put me into the modification process (which was a lower payment) and they did not communicate with their parent company. The mortgage modification process is done in their BAC Home Loans, “LLC”; assumingly for the purpose of accounting, delay of the process, and the intent to scare people out of the program. If you are honest & diligent on your paperwork; proving you can atleast make the reduced payments - even by the skin of your nose, they will modify your mortgage. It may not be a great deal, but other than walking away it’s all they will offer – BUT not unless you can prove a hardship.

    I will have to say, that those that I know who have gone through the process, unethically and not being entirely honest…have gotten a much better deal. However, I am not a gambler or dishonest and I am grateful for what we did receive from the process. 

     

  • Louis

    According to my info, the lenders and investors feel that if  you’re current on mtg payments you don’t qualify for the hamp program. You you have to be delinquent on your mtg payment to be considered for any type of modification, however it is a known fact that when you qualify and apply to modify your mortgage that’s when the game begins with either lost applications or completed improperly, missing pages, etc. All this time you think that you’re talking to the “Home retention department” when in reality you have been dealing with the debt collectors office and all they’re interested in is bringing the account current so they can get the credit. Only 2% of loan modifications applications ever submitted are ever approved.  The game will go on until you’re completly discouraged and either pay back what you owe or be forced into forecosure. So in reality those that created the problem, the banks and morgage brokers are in control and unless we get together and start defending ourselves thru the legal channels all we can do is complain to one another to no avail.  Woody, You are being held accountable for the contract that you signed at closing, which legally it is the lender’s legal right, but who is holding them accountable for the mess they caused.  Woody, I’am Sorry to hear that you were hoodwinke. Louis

  • Louis

    According to my info, the lenders and investors feel that if  you’re current on mtg payments you don’t qualify for the hamp program. You you have to be delinquent on your mtg payment to be considered for any type of modification, however it is a known fact that when you qualify and apply to modify your mortgage that’s when the game begins with either lost applications or completed improperly, missing pages, etc. All this time you think that you’re talking to the “Home retention department” when in reality you have been dealing with the debt collectors office and all they’re interested in is bringing the account current so they can get the credit. Only 2% of loan modifications applications ever submitted are ever approved.  The game will go on until you’re completly discouraged and either pay back what you owe or be forced into forecosure. So in reality those that created the problem, the banks and morgage brokers are in control and unless we get together and start defending ourselves thru the legal channels all we can do is complain to one another to no avail.  Woody, You are being held accountable for the contract that you signed at closing, which legally it is the lender’s legal right, but who is holding them accountable for the mess they caused.  Woody, I’am Sorry to hear that you were hoodwinke. Louis

    • Woody

      Louis,

      Thank you for your sympathy.  As you wrote, I agree that “unless we get together and start defending ourselves thru the legal channels all we can do is complain to one another to no avail.”  Unfortunately right now I am not aware of any class action to “get together” against those unfair (to say the least IF they are not illegal) practices, neither can I afford lawyer(s) to get my money back (which in my case the damage is “only” $2,700+, about two-month worth of payment for our mortgage, a really big deal for us living on SS).

      So, for now, little victims like me can only make small noises, and hopefully when more people create enough loud roars then – and only then – someone with legal authorities could help and stop all those unfair fleecings of trapped poor folks!

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