Had a hardship in ’07 (layoff) which put us into a tailspin for two to three years. Just got a good job this last month and got my first mortgage back in order through the HAMP program. Meanwhile, about two months ago, CitiMortgage got a summary judgment against me for the 2nd mortgage.
Instead of risking garnishment (I’ve heard they can just wipe out your bank account with a garnishment, which would put me back into hardship and would be very counterproductive), I thought I’d call Citi and see if we could work out getting me back in good graces, making payments, now that I have a job again.
When I called them, they informed me that the they had a 0 balance for my second mortgage. That it had been paid off in 2008. This leads me to several questions, I think.. Most of all, I just want to understand how this could be and what might have or likely has happened so I can predict what my next best move should be to protect me, my wife and four little kids, while still fufilling my obligations.
1. What would that pay off in 2008 likely be? Did they sell the note to someone else?
2. One would think the purpose of the judgment would be to get me to start paying again. That clearly is not the case, though, since they zeroed out the balance on the mortgage back in ’08 and pursued the judgment. So what are they trying to do? What’s their game? Is this an accounting move of some kind (drop the original liability from teh books and add a $44k asset via the judgment)?
3. what else would you recommend I look into or what other angles could there be to this that I’m not seeing?
4. How can I protect my new pay check? I don’t mind paying $300 a month even, but I feel completely at the effect of what could happen when I give the attorney for the plaintiff (Citi) all my bank acct info per the judgement.
One option is to click here to find a local bankruptcy attorney and talk about a Chapter 13 bankruptcy. If the house value has dropped below the value that would support both the first and second mortgage, the second mortgage may be stripped and discharged in bankruptcy.
I’d suggest you get a copy of your consolidated credit report and see if anyone is reporting it. That would give you a clue who bought it.
And if Citi just wrote the thing off totally, you could be due for a big tax bill if you are not insolvent. Citi should have issued you a 1099 and reported the forgiven debt to the IRS.
Talk to the attorney, it can kill the judgment and any future unknown obligation for the missing mortgage.
Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.