Citigroup Stopping Foreclosures

Girl In the OC_IHB

Girl In the OC_IHB

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<a href="http://www.knx1070.com/Citigroup-Stopping-Foreclosures/3298012">Citigroup Stopping Foreclosures</a>

<blockquote><em>

NEW YORK (AP) -- Citigroup says it is imposing a moratorium on most foreclosures as part of a series of initiatives aimed at helping at-risk borrowers in states including Michigan remain in their homes - making Citi the latest big bank to announce sweeping efforts to try to curtail losses from souring mortgages.



Citi said late Monday it won't initiate a foreclosure or complete a foreclosure sale on any eligible borrower who seeks to stay in a home if it is the borrower's principal residence, the homeowner is working in good faith with Citi and has sufficient income to make affordable mortgage payments.



Citi said it is also working to expand the program to include mortgages the bank services but does not own. </em></blockquote>
 
[quote author="Girl In the OC" date=1226475608]<a href="http://www.knx1070.com/Citigroup-Stopping-Foreclosures/3298012">Citigroup Stopping Foreclosures</a>

<blockquote><em>

NEW YORK (AP) -- Citigroup says it is imposing a moratorium on most foreclosures as part of a series of initiatives aimed at helping at-risk borrowers in states including Michigan remain in their homes - making Citi the latest big bank to announce sweeping efforts to try to curtail losses from souring mortgages.



Citi said late Monday it won't initiate a foreclosure or complete a foreclosure sale on any eligible borrower who seeks to stay in a home if it is the borrower's principal residence, the homeowner is working in good faith with Citi and has sufficient income to make affordable mortgage payments.



Citi said it is also working to expand the program to include mortgages the bank services but does not own. </em></blockquote></blockquote>
Just delaying the envitable. Unless they start cutting the principal balances, these loan mods are worthless.
 
[quote author="usctrojanman29" date=1226477009][quote author="Girl In the OC" date=1226475608]<a href="http://www.knx1070.com/Citigroup-Stopping-Foreclosures/3298012">Citigroup Stopping Foreclosures</a>

<blockquote><em>

NEW YORK (AP) -- Citigroup says it is imposing a moratorium on most foreclosures as part of a series of initiatives aimed at helping at-risk borrowers in states including Michigan remain in their homes - making Citi the latest big bank to announce sweeping efforts to try to curtail losses from souring mortgages.



Citi said late Monday it won't initiate a foreclosure or complete a foreclosure sale on any eligible borrower who seeks to stay in a home if it is the borrower's principal residence, the homeowner is working in good faith with Citi and has sufficient income to make affordable mortgage payments.



Citi said it is also working to expand the program to include mortgages the bank services but does not own. </em></blockquote></blockquote>
Just delaying the envitable. Unless they start cutting the principal balances, these loan mods are worthless.</blockquote>


This may help people who bought in the early stages of the bubble, but so many of those who bought in 2005 or 2006 in CA, AZ, FL and NV had to take out stated income loans to qualify. If you're making $75K/yr they have got to get that payment and taxes and insurance down to $2,500/mo to fall into the 40% of pretax housing costs that Citi says is part of the deal. The principal balances on houses in my working class neighbord that were bought in 2005 or 2006 are $650-$750K.
 
I've seen a number of examples that they are starting to cut principle. A friend of mine purchased a new home near the peak for around $450,000. At the same time many others in his neighborhood purchased as well. My friend and his neighbor were both paying their mortgage. However, his neighbor called his mortgage company requesting a loan modification. The mortgage company explained that he is not in default and therefore they will not complete a loan modification. My friend?s neighbor decided to quit paying his mortgage while he continued to make payments on his four-wheeler, quad, and other toys and make trips to the desert weekly. He called the mortgage company back a couple of months later and received a principle reduction of circa $100,000. My friend, makes excellent money, did not lose his job, and expresses to his neighbor that he is upset that his home is worth $100,000 less than he paid for it, however, his neighbor explains that he received a $100,000 principle write down by not paying his mortgage and negotiating a loan modification. Speaking to my friend a few weeks ago he explained this to me and said he that he is considering getting a modification as well. Who can blame him? This is only one example of what this type of legislation is creating.



you can read more about this on my blog at:http://orangecountycaliforniarealestate.blogspot.com/
 
To add to Irvine Renters comment- the head of CitiGroups mortgage department made very certain to let everyone know that day 1 after the 90 day moratorium they would foreclose on anyone that lost their job. I found this ironic, they are willing to help those that wasted the money on cars and vacations but eager to foreclose on those that lost their jobs, possibly as a result of others indiscrection.
 
[quote author="Landmark" date=1226584739]I've seen a number of examples that they are starting to cut principle. A friend of mine purchased a new home near the peak for around $450,000. At the same time many others in his neighborhood purchased as well. My friend and his neighbor were both paying their mortgage. However, his neighbor called his mortgage company requesting a loan modification. The mortgage company explained that he is not in default and therefore they will not complete a loan modification. My friend?s neighbor decided to quit paying his mortgage while he continued to make payments on his four-wheeler, quad, and other toys and make trips to the desert weekly. He called the mortgage company back a couple of months later and received a principle reduction of circa $100,000. My friend, makes excellent money, did not lose his job, and expresses to his neighbor that he is upset that his home is worth $100,000 less than he paid for it, however, his neighbor explains that he received a $100,000 principle write down by not paying his mortgage and negotiating a loan modification. Speaking to my friend a few weeks ago he explained this to me and said he that he is considering getting a modification as well. Who can blame him? This is only one example of what this type of legislation is creating.



you can read more about this on my blog at: http://orangecountycaliforniarealestate.blogspot.com/</blockquote>


My question is will this guy get a 1099 at the end of the year for 100k, since he essentially borrowed that much and never paid it back? If so he's in for one WHOPPER of a tax bill... penny wise and pound foolish indeed.

-bix
 
[quote author="Landmark" date=1226584886]To add to Irvine Renters comment- the head of CitiGroups mortgage department made very certain to let everyone know that day 1 after the 90 day moratorium they would foreclose on anyone that lost their job. I found this ironic, they are willing to help those that wasted the money on cars and vacations but eager to foreclose on those that lost their jobs, possibly as a result of others indiscrection.</blockquote>


So is this so called head of Citi going to forclose on the 50,000 poor people they just layed off? Oh, I am sorry, its the same asshole bank that created all this bad lending and now they have the balls to foreclose on the people they screwed. Why are these bankers not in jail?
 
[quote author="biscuitninja" date=1226628395][quote author="Landmark" date=1226584739]I've seen a number of examples that they are starting to cut principle. A friend of mine purchased a new home near the peak for around $450,000. At the same time many others in his neighborhood purchased as well. My friend and his neighbor were both paying their mortgage. However, his neighbor called his mortgage company requesting a loan modification. The mortgage company explained that he is not in default and therefore they will not complete a loan modification. My friend?s neighbor decided to quit paying his mortgage while he continued to make payments on his four-wheeler, quad, and other toys and make trips to the desert weekly. He called the mortgage company back a couple of months later and received a principle reduction of circa $100,000. My friend, makes excellent money, did not lose his job, and expresses to his neighbor that he is upset that his home is worth $100,000 less than he paid for it, however, his neighbor explains that he received a $100,000 principle write down by not paying his mortgage and negotiating a loan modification. Speaking to my friend a few weeks ago he explained this to me and said he that he is considering getting a modification as well. Who can blame him? This is only one example of what this type of legislation is creating.



you can read more about this on my blog at: http://orangecountycaliforniarealestate.blogspot.com/</blockquote>


My question is will this guy get a 1099 at the end of the year for 100k, since he essentially borrowed that much and never paid it back? If so he's in for one WHOPPER of a tax bill... penny wise and pound foolish indeed.

-bix</blockquote>


Other than the temporary hit on the credit score, how is this penny wise and pound foolish? If you get the 1099 for 100k and are in the top (35%) tax bracket, then you have to pay $35k plus a small penalty if you didn't file your quarterlies for a $100k reduction in your mortgage principle. That $100k would have accrued interest. Because your balance is lower, more of your monthly payment goes towards principle until you are paid off.



The ethics are definitely questionable, but it sounds like there is a financial advantage to playing the system.
 
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