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Citi approval requiring seller to continue payments until closing

Posted by Ute Ferdig on May 25, 2012 at 12:05pm in Short Sale Discussions

I received my short sale approval letter from Citi today and one of the terms of the approval letter is that the borrower "make all payments until the sale of the property."  Has anybody closed a short sale with Citi with this language in the short sale approval letter and if so, how much if anything did the seller pay until closing?  My sellers are of course behind on their mortage with Citi and not sure if making payments in Citi's mind means making the current payment or also past due amount.  Obviously, the easiest way to find out is to ask Citi, but since they in the debt collection business, chances are they would say past due plus current.  I know I read on one of the boards that Citi had that language in the approval letter, but not sure how long ago they started doing that.

Any insight would be appreciated. 

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Replies

  • Ute Ferdig May 30, 2012 at 1:52pm
    I asked the negotiator and received an e-mail back saying that it would not affect the short sale if the seller does not make a payment. Just thought I let everybody who responded to my question know. Thanks again.
  • Ute Ferdig May 28, 2012 at 7:50am

    Hello Dawn, Wendy & Bryant.  Thank you for your replies.  Glad to see that you were able to close without borrower having to pay.  I will address the issue with the negotiator and will report back with his response.  Asking the seller to make a payment at a time when they need money to find a rental is not good timing for sure.

  • Wendy Martin May 27, 2012 at 12:55pm

    I got the same letter a few times but when I asked the negotiator said that is just their "policy" but they cannot enforce it if the borrower decides not to keep current.  My clients chose not to pay and everything closed and was fine.  When in doubt, ask.

  • Dawn Harmon May 27, 2012 at 3:38am

    I closed a short sale with Citi on the 2nd last year.....they asked the same thing.....my seller decided to keep it current so it wouldn't affect their credit......but Citi on the 1st being kept current?  I'm thinking that's why most people short sale is because they can't......BTW, their collection tactics ARE bizarre.

     

    They required another one of my sellers (Citi on the 1st) to make atleast one payment every 90 days to prevent collection.  BUT, they required they give their banking account number to a woman on the phone to be debited.  When I called several Citi contacts to confirm this bizarre request, I was told it was the system......it may have changed by now....but that was my experience 12 months ago....

  • Bryant Tutas May 26, 2012 at 5:10am

    Hi Ute. Can you upload a redacted copy so I can read the exact wording?

    Or you can email me at brokerbryant@gmail.com

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