My seller is under contract and about to get approval from the 1st. The 2nd with Citi (home equity loan) suddenly went to collections with no warning to me or the seller (although it was many months behind). I have never been in this scenario before. Citi had the contract, and it made it to a negotiator who said they would need at least 8% for payoff- which we managed. They just needed the approval letter when they sent it to collections.
What do I do now?? Is it possible to get Citi to take the file back from collections once approval comes in from first? Do I start all over with Citi? Is there still a lien on the property if it went to collections? (Is it owned by Citi or the debt collection agency).
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I had a file similar to this and actually it held up our sale for many months but it finally worked out.
My second was also with Citi and they had agreed several months earlier (when the house was listed with a different agent) to a payoff of 6k. That sale failed to close and the sellers relisted with me. In that time the loan was given to a collection agency Cerno Solutions (was with Vericrest prior to that). The collection agency demanded a much higher payoff as well as a reduction in my commission.
I went back to Citi and asked if they could pull the file from the collection agency and go with their original agreement, they told me they could not.
Long story made short...I negotiated with Cerno Solutions and ended up giving them 1% of my commission to make it work. But in the long run I had happy sellers and happy buyers, and that is what matters most.
As far as the lien being on the property...check with your escrow/title department and they can tell you. I'm not sure where you are...but if there is not a lien or mortgage on title, you do not have to clear it. Only matters that affect the property.
Good luck ~~
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