Citimortgage
Escrow Analysis Errors Led to Foreclosure Notice After Chapter 13

This started several years ago. I was happily married, and my wife and I bought our first home, a modest starter home with payments our joint incomes could afford. It was an assumable mortgage, which ended up owned by Citi several years ago.

I won't bore you with the details of my life. I am writing this to try to save other potential homebuyers who have a choice of mortgage companies, and I hope to shed light on the deceptive practices that Citi Mortgage uses in its business model to generate extra fees and income from foreclosures. Those practices fall mainly on poor people who, unlike me, may not have the fortune of a steady job and the supportive family that I am blessed with.

I'll just say simply that my wife left for greener pastures and a nicer home.

I ended up with the house, a Citi mortgage and a mountain of debt that forced me into a Chapter 13 bankruptcy. Over 5 years I paid 100% of my debts and my wife's. But if you read on, you'll see that this is not all related to the bankruptcy, which I know carries a certain stigma. I mention it here to show how they got me, which is just one of many such stories, many of which have nothing to do with bankruptcy.

Only one mortgage payment (of around $600) was included in this plan. As with all secured debts, it was paid off first, and I NEVER missed ONE single mortgage payment other than that.

About two years of regular payments went by when I received a yearly escrow analysis claiming that I had an escrow overage of $2000 and a new, lower monthly payment, about $60 a month lower.

I was quite upset that they would not issue me a check for the overage. They claimed that because of the Chap 13, they wait until the end of the plan, and when my bankruptcy is discharged they re-audit the account. If there is still an overage, they issue a check to me then. I took it in stride and felt blessed to have a lower payment (and an extra $60 a month).

As for the new lower payment, when I received the statement that year in March, I was concerned because the new payment was not reflected. The statement still had the old payment ($60 higher), and if I kept paying that, it would just keep adding to the money they were already keeping from me.

So I called. (If you've been in bankruptcy, you'll know that they shut off your access to the website. Now I know why. Read on.) I called Citi Mortgage and spoke to a woman, who explained that during bankruptcy the statement never changes, but I was allowed to make some photocopies of the document citing the correct payment and mail it in. I even confirmed with my own lawyer that this was OK. This seemed like a reasonable solution. I mean, they couldn't expect me to keep giving them an extra $60 every month on top of the $2K they were keeping, right? Not a big company like Citi?

She also mentioned the "audit" that is done at the end of a bankruptcy, and how what was actually due versus what was paid would line up and any overages would be returned to me.

Another year went by of regular payments, and I faithfully mailed in a check with my new payment and a copy of the new payment letter each month.

Then in January I received another escrow analysis, with an even lower payment! On close inspection, it appeared that all the accounting was based on the old payment. In other words, even though I was sending in $600, they were adding up the previous year as if I was still sending in $660.

I immediately called and explained their mistake. They were showing credits on my account for $60 more each month than I was actually paying, so the new escrow analysis was inaccurate.

Again I was told that this was due to the bankruptcy, and not to worry, because the "infamous" audit at the end would be a cure-all. But they were not able to tell me at that point what my new payment should be. I certainly was not going to send the new lower payment based on an erroneous escrow analysis, because I thought this would leave me short for the audit.

So I checked that my escrow items had not changed much and concluded that I would keep making the same $600 payment.

I remembered that early in the bankruptcy I had to attend a class telling me how irresponsible I had been and how to navigate through this bankruptcy so I wouldn't need to do it again. One of the few things I remembered was being advised to call my mortgage company and make sure that everything is current before discharge, because it is a lot easier to deal with them while you have Chapter 13 protection.

My plan was ending in January, so I started calling in October of 10. That's when I first became clued in as to what they were doing.

All of Citi Mortgage's calls go to call centers in India. I learned early on to keep asking for the bankruptcy department over and over, and they would transfer me there. Then the lady said something concerning: she was showing that I had missed a couple of payments in the previous years.

I said this was impossible, because I have canceled checks and everything. Again I said I have never missed a single monthly payment in years. It turns out that, despite everything I was told, their "computer" still recorded the payment due as $660. When I sent $60 less each month (which was all that I owed), they would hold the $600 in a "suspense" account and then record it a month late. When my next payment came in a month later, they would take $60 from that and put it toward the suspense account and make a full payment (one month late), and then they would add late charges to it. After 3 months they added regular "inspection" fees and other charges that no one can even understand.

However, I was assured that at the end the audit would fix it all.

Only slightly concerned at this point, I tried to take advantage of a little-known law that requires any mortgage company to respond with accurate information (among other things) within 2 weeks when you send in a "Qualified Written Request."

Within one week they sent me a short letter that said, basically, that I needed to send them proof of agreements. Then they sent me a "pay history" that, even if you are the most literate accountant in the land, you could not understand at all. It is intentionally unintelligible, but it serves its purpose as a legal response (to some extent).

Well, guess what? I came out of bankruptcy with a clean slate, 100% paid off on everything I owed. Two weeks later I got a foreclosure notice from Citi Mortgage claiming I was almost $5000 in arrears. I had one month to pay or lose my house.

I was no longer allowed to talk to the bankruptcy department, and when I entered my account number, I went straight to the call centers in India. (Yes, even the collections department, who read off clever scripts and basically said they cannot change what is owed.)

I told my story several times, and after appropriate begging they would switch me to the escrow department, who acted like I was crazy for mentioning this end-of-Chap-13 "audit." They didn't know what I was talking about. Finally one person, who I thought was my savior, said that he personally would take care of the audit and told me to call back a few days later. When I did, he was not there, but another person said they went back one year and showed I am 2 months late instead of 3. I was still several thousand dollars delinquent. The thousands in fees were not his department.

I had to tell a short version of this to no less than 10 people as I kept trying to talk to a supervisor. I found out that, although there are people with those titles, they are powerless to make any corrections to anything that the computer has recorded.

I am normally a calm and polite person, and I didn't want to be rude to any of the $10-a-day Indian call center employees (who were some of the nicest people), but it was wearing me down. After 2 weeks, and 2 weeks closer to the foreclosure date, I was getting nowhere. Another person in the escrow department said he had permission to go back another year, but this would do no good because the payment change was 3 years prior. One lady even hung up on me. Many times on my way to the escrow department, I'd get the recording and have to enter my account info all over again.

Finally, I went to see a lawyer to save my home from being foreclosed on by a Citi computer. He was referred to me as having experience in dealing with Citi Mortgage, and I will never forget what he told me:

"No matter what they tell you, YOU HAVE TO PAY WHAT THEY SAY OR THEY WILL FORECLOSE ON YOU. EVEN IF YOU DON'T OWE IT."

He said they will not fix it, and he told me horrible stories of others, which I dare not repeat without names for liability reasons.

So I begged, borrowed and called Citi to surrender, to make a "forbearance" or loan modification to pay off these fees. (Thanks to 2 years of "audits," they were now down to around $4000.)

(A side note: a day earlier, they sent me a new escrow analysis claiming I had $2500 in escrow overages. But my account was over 3 months "behind" (remember, I have never missed a payment), so they would not let me use the escrow money to save my home. A classic Catch-22. I had to pay everything, and then they would give me the money they were holding.)

An interesting thing happened with one of the highly trained Indian call reps. As I was explaining that I was conceding under protest and fear of losing my home, she looked at the figures and said all I actually owed was around $2500. She asked if I could pay half, and then asked if I had a little more, and claimed it would be easier and cheaper than an arrangement.

Somehow (I taped the call, but it is a blur right now), she was able to figure out that the exact amount I had in my bank, including my last paycheck, was the exact amount due, around $2500.

Again, nearly in tears, I said I was doing this under protest and on the advice of my lawyer, and that I do not owe this money but I know they will take my home from me. I asked her, if I made this $2500 payment, whether she could assure me that no other random fees would be charged and that I would be current and not foreclosed on. I was surprised when she said "Yes."

So I paid, and borrowed money from friends to survive until the next payday.

I was very surprised when a few weeks later I received another escrow analysis, and a check: my escrow overage of $2500. I thought I was on the road to living again.

Then, a week later, I got a call from Citi saying I still owe $900 in fees.

A few days later I got a letter from a law group claiming to represent Citi, saying they had reviewed my account and I am current through this month.

Then I got another letter from Citi saying they had reviewed my account and that the $900 in fees are in fact owed, and that they omitted them by accident.

I just got my statement. In addition to my regular payment, there are around $400 in various fees that they claim I owe. (Perhaps for the law group that sent the letter saying I didn't owe?)

I end here because that is where it is now. I will update if I can. Although I make light and jokes, this has seriously worn me down these last months. I couldn't make this up if I tried.

And if I didn't have God-given friends and family to help me with the thousands of dollars, they would now own my house.

I will never look at a foreclosure story the same way again. God bless.

Company: Citimortgage
Country: USA
Site: citimortgage.com

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