Consumer complaint received 2019-02-03
Product: Mortgage — Home equity loan or line of credit (HELOC)
Issue: Struggling to pay mortgage — 
Company: CITIBANK, N.A. (NY)

This complaint concerns my attempt to obtain modification of a Home Equity Line of Credit ( HELC ) from CitibankCitiMortgage ( Citi ) , which is essentially a second mortgage on the home where I live with my young adult XXXX son, a co-operative apartment in XXXX XXXX XXXX . Because of the manner in which Citi treated my request for mortgage assistance we are in genuine danger of losing our home.

As I will explain in more detail, Citi rejected my application for mortgage assistance without a reason or explanation. It gave short shrift to my appeal from the denial of modification, despite promising a legitimate review. While the holder of the primary mortgage agreed to a modification that significantly lowered the monthly payments, Citi arbitrarily raised the interest rate on the HELC three times in eight months last year. Finally, Citi refused to even consider any means by which I could avoid foreclosure even though its interests in the property are completely safeguarded by the extraordinary appreciation in market value that has, by its own admission, taken place. 

I bought our apartment in XXXX for {$210000.00} with a conventional mortgage from XXXX XXXX. I obtained the HELC from Citi in XXXX in order to pay off personal credit card balances and replace the interest on those debts with the tax-deductible interest on the HELC. Citi 's appraiser valued the property at that time at {$400000.00}. The terms of the HELC provided for interest only payments at a variable APR of approximately 3.38 % ; as the interest rate fluctuated the monthly payments went from {$390.00} to {$420.00}. At the maturity date ( XX/XX/XXXX) the payments went up to {$990.00}. 

I started the process to apply for a modification of the HELC in XX/XX/XXXX. Thirteen months went by and I never received a decision, and the horrors I encountered in that process mirror the stories found in the Consumer Complaint Database about how Citi handles requests for mortgage assistance multiple turnovers of staff, repeated requests for the same documents that then expire. At one point my file was accidentally closed and sent to the foreclosure lawyers, even as I continued to receive form letters acknowledging that my request for modification had been received and was proceeding. However, this complaint concerns my most recent application for modification. This one was filed in XX/XX/XXXX with the help of a HUD-approved housing counseling agency, XXXX XXXX XXXX of XXXX ( XXXX ). 

Although I responded to every request for information from and supplied every document requested to Citi, my application was rejected in a letter from Citi dated XX/XX/XXXX ( enclosed ). I was somewhat confused by the opening sentence, which informed me that Citi was disappointed that we can not approve your request for a Citi Supplemental 2nd lien program at this time. The application was a general form requesting modification of mortgage terms because a hardship was making it difficult to meet payments. I was never given any specific information regarding Citis modification programs nor did I apply for any specific type of assistance. 

The letter continues : We consider a number of factors in making credit decisions. In your case, we were unable to approve your mortgage assistance request for Citi Supplemental 2nd lien program because : Citi Supplemental 2nd lien program requirements [ were ] not met : In performing our underwriting of a potential modification we could not reduce your principal and interest payment less than the premodification principal and interest payment.

In essence, the letter said that Citi was unable to approve my request for mortgage assistance for the Citi Supplemental 2nd lien program because the requirements of that program were not met. Nowhere in this letter does Citi explain what these requirements are, or in what ways my application did not meet them. That reason or non-reason does not satisfy the most minimal standards for consumer protection or lender transparency. 

The XX/XX/XXXX letter informed me of my right to an appeal and promised that Citi would conduct an independent review of the denial of my [ application for loan modification ]. I was informed that the expected time frame for such a review was 30 calendar days, which would seem consistent with a thorough re-examination of the application, but it took Citi only 8 days to write the XX/XX/XXXX letter denying my appeal ( also submitted ). 

The ultimate basis for the decision that unfortunately [ my ] mortgage terms will continue to remain unchanged was word for word, verbatim, the above-quoted section from the XX/XX/XXXX letter that the Citi Supplemental 2nd lien program requirements were not met. The only difference is that the XX/XX/XXXX letter informs me that prior to arriving at this conclusion Citi had conducted a comprehensive review of the information you submitted regarding your NPV inputs ... Except that I did not submit any information regarding NPV inputs because I have no idea what NPV inputs are. Was this an error ( perhaps some other applicant submitted information regarding their NPV inputs )? Perhaps the lack of NPV input information explains why it took only 8 days instead of 30 to consider my appeal. Confusing jargon to further obfuscate why Citi would not help me? Or was this a deliberate fabrication to dress up the appeal decision and make it look as if a true, considered review had been taken. That viewpoint is certainly supported by the simple repetition of failure to meet the unspecified requirements of a program in some unexplained way. 

What is particularly cruel or callous about the outcome of my particular case is that Citi had choices other than pressuring me into foreclosure by ever-higher interest rates and monthly payments. Unlike homes that are now worth considerably less than the debt they carry, Citi has the luxury of a significant cushion protecting its interest in this property and its own data support that assessment.

At the last minute, despite having notified me my application was complete, Citi required that a new appraisal of the property be performed before a final decision. ( A previous appraisal in XX/XX/XXXX, performed in connection with my earlier application for modification, valued the property at {$620000.00} ). The most recent appraisal, dated XX/XX/XXXX, valued our home at {$940000.00}. The outstanding combined balance on the primary mortgage and the HELC is approximately {$250000.00}. Thus Citis own appraiser documents that the excess equity after paying off both the primary mortgage and the HELC is over {$600000.00}. Even allowing for fluctuations in the housing market Citi can never lose its investment and is guaranteed payment when the property is sold.

Citi is thus in a position to offer a modification that would allow us to stay in our home long enough for two things to happen : My XXXX child can move out into supported housing and then the apartment is put on the market for a regular ( as opposed to foreclosure ) sale. After all the debts are paid there will be enough money for me to find a place to live. 

The first piece is for my son ( who is XXXX and has several serious XXXX ) to obtain a place in a supported housing program. He has already been approved by the agency that administers the housing placements ( I can provide Citi with a copy of the approval letter if that would facilitate a modification ). He has two interviews in the next three weeks and there are other possible options if those programs are not a good fit. The only question is timing - how long it will take to find a suitable placement and whether or not there is a waiting list for a place. I have little or no control over those factors but there is little harm to Citi in waiting long enough for this to happen. 

I can not move forward with putting the apartment on the market until my son is settled in a good placement ; the transition to living semi-independently has already shaken his fragile emotional stability, but the horror of losing his home to foreclosure before then, and the specter of homelessness, is what would push him right over the edge. 

Once my sons situation has been resolved, my plan is to hire a local real estate firm and list the apartment for sale. I have been closely monitoring the listing and sale of apartments in this building and comparable properties in the neighborhood. Our apartment has two bedrooms, but a one-bedroom apartment in the building sold in XX/XX/XXXX for {$670000.00} ; a two-bedroom apartment in the same line as ours is currently listed for sale at {$770000.00}. 

All we need is for Citi to be fair and reasonable. If they can only give us time they will get their money.