Consumer complaint received 2017-06-20
Product: Mortgage — Conventional home mortgage
Issue: Struggling to pay mortgage — 
Company: CITIBANK, N.A. (WA)

I am submitting this complaint as a XXXX on behalf of my clients. My clients obtained in XX/XX/XXXX an FHA-insured 1st mortgage that was being serviced by CitiMortgage in XX/XX/XXXX when they began to have financial trouble because the wife was injured and could not work. They obtained a 2nd mortgage in XX/XX/XXXX to pay some debts but it did n't solve their problems. They fell behind on both loans, which were both being serviced by CitiMortgage. In XX/XX/XXXX, a non-judicial foreclosure was begun and then stopped because they entered into a loan modification on the 1st mortgage & a subordinate Deed of Trust for the arrears. They fell behind again in XX/XX/XXXX & another foreclosure was initiated on the Second Mortgage. They began applying for a loan modification on both loans & were told by Citi that they could apply for modifications on both of them at the same time & through the same process. They continued to submit paperwork as requested but Citi started another non-judicial foreclosure on the 2nd mortgage, with a sale scheduled for XX/XX/XXXX. They knew about the sale date and were in contact with Citi about it, but were repeatedly assured that the foreclosure sale would not go forward because they were applying for a loan modification. A couple of weeks before the scheduled sale, they were advised telephonically by Citi representatives that they had been approved for a modification on both of their loans. They were ecstatic! They were assured that the foreclosure would not happen & they waited for their modification paperwork to be received. Before they received the paperwork, a man came to their door to tell them that the foreclosure had happened & he represented the owner. My clients thought the man had purchased their 2nd mortgage - not their home. But they immediately contacted Citi to ask what happened and were told that there was an error, which would be fixed by Citi - and to hold tight. They waited for several weeks, being continually reassured by Citi to just wait because they were working on it until eventually Citi called them to say that they were out of luck & the purchaser wanted too much money from them. My clients were devastated but figured that they would just have to pay off the 2nd mortgage loan, which they thought had been sold, and pushed Citi to give them the modification on the 1st mortgage that had been promised. They never received that modification in spite of numerous contacts in the ensuing months. My clients continued to struggle financially and to seek to obtain a loan modification on the 1st mortgage, serviced by Citi. In XX/XX/XXXX, they were forced to file a Chapter XXXX bankruptcy & their lawyer, who has been suspended pending disbarment did n't bother to apparently even look at the property records & identified them as owning their home with 2 mortgages owed to Citi. Citi did n't take any position in that case. My clients kept applying for a loan modification from Citi on the 1st mortgage & finally were approved in XX/XX/XXXX. At no time did anyone from Citi ever tell them that they did not own their home any longer & it did n't take the position that they could n't get a modification because they did n't own it. The property buyer occasionally had a realtor stop by but he did n't take any definitive action for years. It appears that he was waiting for the statute of limitations to run on the 1st mortgage to see if he could avoid it entirely, while having my clients drag out the process applying for a loan modification and for them to pay the expenses for upkeeping and repairing the house. My clients continued to think that they had to repay the 2nd mortgage to the buyer, but just fixated on getting the 1st mortgage taken care of first. Once they received the loan modification in XX/XX/XXXX and began making payments ( it was also recorded in the county records ), they waited for the 2nd mortgage owner to contact them again. They were not contacted again until they were served with a quiet title lawsuit by the 2nd mortgage loan purchaser who was seeking to avoid the 1st mortgage entirely & to remove my clients from the property. Citi was named as a defendant in the case & the only position it took was that it 's lien position should be protected. It never advised the Court about the loan modification that had been recorded, the problems with the 2nd mortgage or that it had been stringing my clients along for years & taking their money even though it knew they did not own the property as a direct result of the actions of CitiMortgage. My clients have lost title to the house although they are pursuing their counter & cross-claims. We have appealed the quiet title decision. We have also sued the foreclosing trustee company because it did not have authority to act under Washington law, but for purposes of this complaint, the focus is on CitiMortgage and its handling of my clients & their loans for many years. CitiMortgage never told my clients that they did n't own their home & had lost it based upon its employees ' lies ; it " modified '' a loan that was secured by the property but for which my clients had no personal liability ; and caused my clients to be misled about what had happened to them back in XX/XX/XXXX. These unfair and deceptive actions first began in XX/XX/XXXX when Citi employees told my clients that they could apply for & had been approved for a loan modification on both loans through the same application process. At all stages in its dealings with my clients, CitiMortgage never told them the truth, never provided them with accurate information & took action to collect on a debt for which they did not have any personal liability.