settlement amount of 2nd mortgage with citi
Try to work out some sort of a payment arrangement with your lender for the second mortgage because if you go delinquent on your second mortgage, the lender can foreclose on your house and property. The foreclosure process varies from state to state, but generally takes from two to 18 months depending on the terms of your loan and your state of residence. However, normally if mortgage payments are not received within 150 days, the bank can proceed with the foreclosure process.
This approval letter was received from the loss mitigation department in May of 2009. You can see on the second page that the approval is clean and will even show how the settlement will report on the borrowers credit. It took 4 additional months to receive approval from the first mortgage on this deal. By the time we received approval from the first mortgage this second mortgage with Citi had “charged off” and gone to their “recovery department“. Cities recovery department is at lease twenty times more difficult to work with than their loss mitigation department.
In your case, though, you’ve done a loan modification on your first. Both of your lenders (1st and 2nd mortgage) have reached the same conclusion: you’re $100K underwater and the second is $96K – foreclosing would gain them nothing. Mostly likely your second mortgage debt was forgiven, making your the debt unsecured and they’ve charged off the debt. I’d call your first mortgage holder to confirm.
The second mortgage would be repaid after the first mortgage is paid in full. In fact, if the sale price is less than the value of the mortgages held against it, then in some states you could still owe an unsecured balance called a deficiency balance. The good news is that this new deficiency balance (if it exists and if your lenders pursue it) is an unsecured debt that you could conceivably enroll into a debt settlement program.
If the default is caused by a temporary condition likely to end within 60 days, the lender may consider granting “temporary indulgence”. Those who have suffered a temporary loss of income but can demonstrate that the income has returned to its previous level may be able to structure a “repayment plan”. This plan requires normal mortgage payments to be made as scheduled along with an additional amount that will end the delinquency in no more than 12 to 24 months. In some cases, the additional amount may be a lump sum due at a specific date in the future. Repayment plans are probably the most frequently used type of agreement.
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