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In this situation the owner lived in the high desert community of Palmdale and had refinanced his house several times over the years. He owed approximately $470,000 on his first mortgage note. He also had a loss in business revenue so he took out a large, over $150,000 second equity line on his home. Basically he owed over $570,000 in mortgage debt on a home which now was worth approximately $120,000.

The homeowner had been unable to pay his mortgage for several years and after being denied a loan modification several times because of his decrease in income and high mortgage debt on his home. He had an adjustable rate mortgage, ARM which kept adjusting up and ever increasing his monthly payments with little going towards his equity which now was negative equity. The owner was one week away from a foreclosure sale when I was contacted by his family attorney. The owner was becoming physically ill from the fear of the foreclosure sale and his concern in his words that “he and his family would be thrown out into the street.”I was asked to stop the foreclosure and short sell the home so that the owner could avoid having to do a bankruptcy since he had no other large debts which would warrant a bankruptcy and he was trying to improve his credit and pay off his bills.

I was able to convince Citi Mortgage to postpone the foreclosure sale and allow us to short sale the home instead. I actually stopped the foreclosure sale completely only the night before the scheduled sale. The owner is very grateful that he was allowed sufficient time to arrange for a rental home and now is rebuilding his credit after avoiding a bankruptcy and will be ready to purchase another home in about two years. His business is doing well and his rental payments for his lovely home is about half of what he had been paying. In this situation both approval letters for the first and second mortgage are identical except the loan numbers on the cover letter of each approval letter was different showing the debt for both loans as being forgiven. Please contact me for a consultation if you are interested in learning how to avoid a bankruptcy from debt on a first and second mortgage note.

Citi Mortgage Short Sale Approval Letter-First Loan