2nd Loan CITI RECOVERY DEPT WOULD RATHER FORECLOSE & GET NOTHING from Short Sale
I have a short sale with Citi as the 2nd loan that is with their recovery dept. The 1st lender wants to give Citi $3500. Citi says that because it's a HAFA short sale, they HAVE to get $8500. Going back to the 1st lender (Pennymac), they said that they can choose to give Citi UP TO $8500 but it does NOT have to be $8500. The homeowners association already has a foreclosure sale date on this unit. The reason that they did not pursue the foreclosure is because the homeowner was in bankruptcy. I am explaining to the Citi Recovery Rep all of this and he said that he rather get nothing or it has to be $8500. The 2nd was included in the BK. I have tried reaching out to CITI's SOCIAL MEDIA but so far-- NO RESPONSE. The person at the Executive Response team just connected me with the same guy at Citi Recovery. Any feedback anyone?
Replies to This Discussion
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Permalink Reply by Kevin - Greenville, SC on
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You can expect the 2nd to only get the full $8500 per HAFA if the 2nd is large (i.e., if the total UPB was $8500 surely the 2nd can't count on a full payoff from the 1st). Makes sense with you think about it in those terms.
Remember it's up to a total of $8500 towards subordinates, not everyone gets $8500 regardless of the size of the loan balance.
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Permalink Reply by TOP END Properties on
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"I believe Citi is right and they are entitled to request the $8,500 if the 1st lien holder is HAFA approved" .... agreed.
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Sara,
Here is the response I received from the Treasury Dept. -
The Treasury guidance is clear that the subordinate lien payoff is a cap not a mandatory amount. Can you confirm whether your second lien folks are under the impression that they must receive the cap of $8,500 on a HAFA short sale pay off. If so, can you please correct their understanding of the policy.
Thank you.
Laurie A. Maggiano
Director of Policy
Homeownership Preservation Office -
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Permalink Reply by Kacey Queen on
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If it is a HAFA short sale You could try to escalate with HAMP? They can ensure that Pennymac and Citi are following the HAFA guidelines.
https://www.hmpadmin.com/portal/resources/advisors/escalation.jsp
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Permalink Reply by Sara Mehrpouyan Los Angeles CDPE on
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We finally got the short sale closed. Citi sold the loan to Real Time Resolutions. Pennymac gave them $3500 and the buyer came up with $5000 to make $8500.
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