Citimortgage Pursues Foreclosure Against Veteran With The Zeal Of A Fat Guy At An All-You-Can-Eat Buffet

All Tom and Sandy Lennon wanted to do in 2008 was retire to Naples, Florida and play golf. The last thing they wanted was a decade-long legal battle with Citimortgage.

Unfortunately, that is exactly what they got thanks to the 2008 financial collapse. Overnight, they discovered their house in Warwick, New York had lost 75% of its value.

The Lennons soon found they couldn’t sell their home. So they asked their lender, Citimortgage (Citi) for a short sale or a Cash-For-Keys deal.

Citi oddly enough refused. The decision was odd because it made no sense at the time. The federal government had just bailed out Citi and every other lender was cutting deals. One of the requirements to receive TARP money was that the recipients had to assist homeowners.

Negotiations between Citi and the Lennons soon deteriorated. As a result, Citi filed a foreclosure lawsuit against Tom and Sandy in 2010.

For nearly five years the case dragged out. Citi refused to give the Lennons a Cash-For-Keys deal or let them short sell the property. But why? Why is Citi pursuing a foreclosure with the zeal of a fat guy at an All-You-Can-Eat Chinese Buffet?

MFI-Miami Exposes The Dirty Little Secret Citimortgage Was Hiding

After nearly five years of litigation, MFI-Miami was brought in to review the file. An initial review of the litigation file indicated the Lennons might not have much of a chance.

I requested the loan file from Citimortgage. The Citi documents gave us a plethora of information.

JACKPOT! I found the missing piece that would blow this foreclosure case wide open. I soon discovered why Citi wasn’t allowing the Lennons to do a short sale or a Cash-For-Keys deal.

The first thing it gave us was the MERS Identification Number for the loan. The MERS database indicated that Citi was not the note holder. The note holder was Hudson City Savings Bank.

In addition, MERS also stated that Citimortgage was only servicing the loan. Thus, Citi had no ownership interest and lacked standing to foreclose. They also had no legal authority to authorize any type of deal. 

Citi was hoping a judge would grant them a foreclosure so they could collect the mortgage insurance. Then sell the property to recoup their losses.

Citibank’s senior executives and their lawyers soon realized the jig was up and withdrew the foreclosure lawsuit.

Citimortgage Returns But This Time They Brought Knuckles!

Most banks would tuck tail and hide after withdrawing a foreclosure case. But not Citimortgage.

They regrouped and returned last Agust to attempt another foreclosure against Tom and Sandy.

However, this time they brought in Knuckles. Yes, they brought in Mark Knuckles from Knuckles, Komosinski & Manfro LLP. Knuckles refiled the case on 10/2/2017.

Citi attempted to fix the problems they had with the 2010 foreclosure against Tom and Sandy. However, they still could not produce the original wet inked copy of the note. However, Knuckles did file a Lost Note Affidavit.

Citimortgage Tries To Fix The Problem Only To Create More Problems

Citi attempted to correct the chain of mortgage assignments. Except, that appears to have created more problems.

Knuckles included a mortgage assignment recorded 11/4/2010 with the new complaint. This assignment indicated MERS acting as a nominee for Citi transferred the loan to Citimortgage. However, this contradicts the MERS database. The MERS database indicates the mortgage was already assigned to Hudson City Savings Bank.

In April of 2016, Citimortgage filed another mortgage assignment dated 2/11/2016. The mortgage assignment indicated Citimortgage assigned the mortgage to Hudson City Savings Bank. 

Knuckles also included an unrecorded mortgage assignment from M&T Bank to Citimortgage dated 8/16/2017. M&T Bank merged with Hudson City Savings Bank in 2015. 

This appears to be a Hail Mary play by Knuckles in case the judge doesn’t accept the lost note affidavit. However, the new mortgage assignments create another problem for Citi. It draws attention to the involvement of Hudson City Savings Bank and the lost original note.

The assignments indicate the note was transferred to Hudson City Savings Bank. New York lending law and industry standards dictate the mortgage must follow the note. Therefore, if the note got transferred to Hudson City Saving Bank and then back to Citi, where are the endorsements on the note?

A lender can not transfer ownership of a promissory note without having the original copy. So Citimortgage transferred the note to Hudson City Savings Bank and they lost it or Citimortgage lost it. Either way, Citimortgage has some serious issues to deal with before they can foreclose on Tom and sandy Lennon.