Citimortgage Lawsuit

Case 4:11-cv-00443-RP -CFB Document 1
Filed 09/23/11 Page 1 of 82
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF IOWA CENTRAL DIVISION
KEITH GOODYK, on behalf of himself and all others similarly situated, Plaintiff,
V.
: :
Civ. No.: PLAINTIFF DEMANDS A TRIAL BY JURY
CITIMORTGAGE, INC., Defendant.
CLASS ACTION COMPLAINT Plaintiff Keith Goodyk ("Plaintiff) brings this action on behalf of himself and a class of similarly situate homeowners ("Class Members") against CitiMortgage, Inc. ("Citi" and "Defendant"), and except for information based upon his personal knowledge, alleges upon information and belief based upon investigation of their attorneys and facts that are a matter of public record, as follows: NATURE OF THE ACTION This nationwide class action seeks to put an end to Citi s fraudulent and illegal foreclosure practice and its equivalent of price-gouging schemes of extracting improper fees and charges from vulnerable homeowners. Specifically, as set forth in detail below, this action also challenges Citi s twin practices of unlawfully seeking to foreclose on residential properties, while at the same time enticing and often entering into modification agreements with struggling homeowners that Citi does not intend to honor. This practice allows Citi to extract improper fees and charges in violation of federal and state law from homeowners who had fallen into arrears on their mortgages. After
collecting massive balloon payments (inclusive of excessive/illegal fees and costs) from vulnerable homeowners with the assurance that this will bring their accounts current, Citi engages in a fraudulent scheme of keeping the monthly mortgage payments in suspension accounts. By not reflecting receipt of the payments towards the homeowners accounts, Citi unlawfully and illegally charges fees and cost in violation of its contractual and other obligations and also deliberately and wrongfully reports borrowers as delinquent to the credit reporting agencies. Homeowners have suffered billions of dollars as a result of Citis unlawful conduct. 2. Citi has routinely charges Plaintiffs and Class Members fees, charges and
penalties not permitted by their loan and note contracts, not permitted by federal and state laws. The fees improperly charged and collected are in practice and practical effect undisclosed late fees, finance charges, penalties, refinancing penalties, recording fees, inspection fees, levied by Citi on consumers. Citi does not inform Plaintiffs and the Class when Citi charges and collect improper and unlawful fees. To the contrary, Citi routinely makes affirmative misrepresentations about such fees. As a result of Citi s misrepresentations and omissions, Plaintiffs (until recently) and many if not most Class members remain reasonably unaware that the fees, charges and penalties Citi imposes and collects are improper under the loan and note contracts drafted by Citi or other banks, and under applicable laws, including state laws and federal regulations. 3. These additional costs, which this action seeks to recover, as well as the
unlawful foreclosure actions and wrongfully reporting the homeowners as delinquent to credit reporting agencies, has placed Plaintiff and other borrowers whose mortgages are serviced by Citi in difficult financial straits, putting their homes and lives in jeopardy.
Case 4:11-cv-00443-RP -CFB Document 1 4.
In particular, Citi utilized a computer system to automatically assess fees
for late payments, delinquency, finance charges, penalties, refinancing penalties, recording fees, inspection fees and other charges without regard to the terms of the borrowers loans or the relevant circumstances. Instead of being placed on reasonable parameters, the computer system is programmed to assess as many charges as possible and to pay first all outstanding fees and costs before satisfying interest and principal. By keeping the mortgage payments in suspension accounts and failing to reflect receipt of the payments towards the homeowners accounts, Citi amplified its fraudulent scheme of charging excessive fees and costs. 5. Citi concealed the nature of the fees being assessed on the monthly
statements mailed to Plaintiff and Class Members by describing them simply as "other" charges or fees. In this manner, Citi victimized and further increased the indebtedness of persons who were already in danger of losing their homes to foreclosure. Citi s scheme has been ongoing for years and was in existence when Plaintiff and Class Members obtained their mortgage. This practice of charging illegal fees was particularly exasperated in the recent mortgage foreclosure crisis of 2007. 6. During the recent foreclosure crisis, between October 2008 and January
2009, Citi made a plea for survival and received $45 billion in funds from the United States Government as part of the Troubled Asset Relief Program ("TARP"), funded by the taxpayers. By accepting these payments, Citi agreed to comply with Home Affordable Modification Program ("HAMP") - a program under which Citi and other major mortgage services and lenders receive incentive payments for providing mortgage loan modifications and other foreclosure prevention services to eligible borrowers such as Plaintiffs and the putative class members.
7.
As a HAMP servicer, Citi aggressively and falsely advertised its
commitment to help homeowners obtain affordable loan modifications. Citi has advertised its various homeowner assistance initiatives, including HAMP, on its website. Further, Citi has assured homeowners that their homes will not be sold while they are awaiting decisions on modification requests and related internal reviews. 8. After enticing homeowners to apply for loan modifications and receiving
all their financial information, Citi misrepresented the nature of the loan modification process, ensnaring homeowners to apply for loan modifications that they did not understand. Specifically, Citi misled homeowners by: promising to act upon requests for modifications within a specific time, usually one or two months, but instead stranding consumers without answers for more than six months to one year; falsely promising consumers that their initial trial modifications would be made permanent if and when they made the required three payments on those plans, but then failing to convert those modifications; falsely assuring them that their homes would not be foreclosed while their requests for modifications were pending, but then sending foreclosure notices and scheduling auction dates and even selling consumers homes; misrepresenting the eligibility criteria for modifications and providing consumers with inaccurate and deceptive reasons for denying their requests for modifications; falsely notifying consumers or credit reporting agencies that consumers were in default when they were not; and offering modifications on one set of terms, but then providing them with agreements on different terms, or misrepresenting that consumers had been approved for modification. 9. In an attempt to maximize its profits, Citi has consistently delayed,
avoided, and otherwise hindered the modification process by denying it has received borrower paperwork, losing paperwork, and neglecting to inform borrowers as to the
status of their applications. As a mortgage servicer, Citi has a financial interest in avoiding loan modifications and keeping mortgages in default in part because doing so generates more fees, unpaid interests, principal balance and service charges. Instead of providing promised permanent loan modifications, Citi demanded thousands of dollars in balloon payments and previously undisclosed fees. 10. Citis misconduct has not gone unnoticed. The Senate Judiciary
Subcommittee on Administrative Oversight and the Courts convened hearings to consider allegations that mortgage lenders and mortgage servicing companies, including Citi, have deepened the foreclosure crisis and improperly used the court system to collect unwarranted and unreasonable fees. In his opening statement, Senator Charles E. Schumer aptly observed that, as a result of these unlawful practices, vulnerable homeowners trying desperately to stay afloat are instead suffering a "death of a thousand fees." 11. Citi has profited enormously from this fraudulent scheme. Citis actions,
which serve only its interest in extracting as much money as possible from borrowers it deems are at risk of default, violate its contractual obligations, and are otherwise fraudulent, misleading, unfair and deceptive, and in violation of federal and state law. 12. By this nationwide class action, Plaintiff and Class Members seek to put
an end to Citi s fraudulent scheme and seek relief on behalf of all homeowners who suffered losses on account of Citi s (a) unlawful foreclosure actions, including but not limited to, payments of excessive and illegal fees, penalties and charges arising out of improper foreclosures or attempted foreclosures and expenses incurred in defending the lawsuit, (b) wrongfully reported to the credit agencies as delinquent, (c) unlawful forcedplaced insurance that was not required or called for, and (d) extraction of excessive!
increased interest rates (collected on wrongfully capitalized principal balances) and collection of improper fees, especially late fees, delinquency fees, finance fees on account of Citi s tardiness in accounting for payments received by misuse of escrow and suspense accounts. JURISDICTION AND VENUE 13. This is a proposed nationwide class action. This Court has subject matter
jurisdiction over this action pursuant to 28 U.S.C. 1332(a) because the Plaintiff and Defendant are of diverse citizenship and the matter in controversy exceeds seventy-five thousand dollars ($75,000.00) exclusive of interest and costs; and pursuant to 28 U.S.C. 1332(d)(2), because the Plaintiff and the vast majority of the putative class (each individual member a "class Member" and collectively the "Class Members") are of diverse citizenship from the Defendant and the aggregate amount in controversy exceeds five million dollars ($5,000,000.00) exclusive of interest and costs. This Court also has subject matter jurisdiction over this action pursuant to 28 U.S.C. 1331 as this civil action arises under the laws of the United States. 14. Venue is proper in this Court pursuant to 28 U.S.C. 1391 because a
substantial part of the events or omissions giving rise to Plaintiffs claims occurred here and Defendant regularly transacts business in this District and is subject to personal jurisdiction in this District. PARTIES 15. 16. Plaintiff Keith Goodyk is a resident in Pella, Marion County, Iowa. Defendant CitiMortgage, Inc. is a member of CitiGroup, Inc. and services
residential mortgages throughout the United States. Citi has its principal place of business at 1000 Technology Drive, Mailstop 730, OFallon, Missouri 63368.
n .
As servicer, Citi services loans it originated, as well as loans originated
and/or owned by other lenders, Government Sponsored Enterprises and private investors who hold pools of loans in securitized trusts. Citis mortgage servicing rights totaled $4.554 billion, $6.530 billion, $5.567 billion, $8.380 billion and $5.439 billion on December 31, 2010, 2009, 2008, 2007 and 2006 respectively.
FACTUAL BACKGROUND Citis Role as Servicer of Mortgages
18.
Every home mortgage contains provisions specifying when payments are
due and when they are considered late, and providing that only reasonable fees may be assessed if payments are not timely. 19. Plaintiffs mortgage and note are typical in this regard and provide that the
Plaintiffs mortgage payment is due the first of each month. The payment is considered late if they were not received by the end of fifteen calendar days after the date they were due. In the event of a late payment, the Plaintiffs note provided that a single late charge in the amount of 5% of the overdue payment would be assessed. Plaintiffs mortgage also permits reasonable fees and costs for services performed in connection with borrowers default. 20. Plaintiff and Class Members make their monthly mortgage payments to
mortgage servicing companies. Citi is the fourth largest residential mortgage servicer in the United States and in addition to servicing mortgages originated by it and its affiliate companies for which it acquires servicing rights following their sale to investors or otherwise, Citi also "services 4.3 million mortgages that it does not own." See Testimony of Vikram Pandit dated February 11, 2009, before the House Financial Services Committee, United States House of Representatives. 7
As part of its mortgage servicing operations, Citi collects monthly
mortgage payments from the borrowers consisting of principal and interest, taxes and insurance, and other fees and charges that may be assessed and disburses these payments to the appropriate parties such as lenders, investors, taxing authorities, insurers and other relevant persons. In addition, as mortgage servicer, Citi is also the entity through which any mortgage loan modification request must be made, and has the ability to approve and analyze mortgage loan modifications. 22. Servicers receive three main types of compensation: a servicing fee, which
is a percentage of the outstanding balance of the securitized mortgage pool; float income from investing homeowners mortgage payments in the period between when the payments are received and when they are remitted to the trust; and late fees, ancillary fees and charges (these include delinquency fees, finance charges, inspection fees, appraisal fees, title fees, recording fees, process service fees, servicing fees, and other foreclosure related fees and expenses). 23. Because Citi earns "float" income on funds held, and retains all or part of
certain fees that borrowers must pay, Citi has an incentive to impose additional fees on consumers. Float interest income thus gives servicers, such as Citi, an incentive to favor any resolution that involves a prepayment, such as refinance, a sale of home, or a foreclosure. Also, by capitalizing arrears and unpaid fees, Citi augments the principal loan balances, and as such its fixed servicing fees. The late fees can tempt a servicer to post payments in a tardy fashion or not make collection calls until late fees are assessed, and capitalize the arrears towards the principal loan balance. 24. In the event of a foreclosure, Citi gets reimbursed and takes the accrued
feesincluding fees for property inspections, purported attorneys fees and costs, and 8
late fees, among othersoff the top of the foreclosure proceeds before investors get their share. Mortgage servicers are essentially able to receive cost-plus percentage-of-cost compensation when foreclosing. Thus, as mortgage servicer, Citi is incentivized to maximize the foreclosure-related fees. 25. Thus, Citi has a natural incentive to inflate the expenses and contract with
these affiliated businesses, such as insurance companies, property valuation companies, inspection companies, title recording companies, process servicing companies and other companies specializing in providing services for loans in default, for various services, the costs of which are imposed on the borrower. If the borrower is unable to pay the amounts demanded, these fees and expenses are taken out from a foreclosure sale. 26. The fees servicers can lard on in foreclosure can be considerable, and
there is effectively no oversight of their reasonableness or even authorization. 27. Mortgage servicers, like Citi, increases its foreclosure related fees in two
ways. First, by charging "junk fees" either for unnecessary work or for work that was simply never done and indulging in variety of abusive servicing practices, including improper foreclosures or attempted foreclosures; imposition of improper fees, especially late fees; exorbitant process servicing costs; forced-placed insurance that is not required or called for; and misuse of escrow funds, to maximize the "junk fees." Second, by padding the costs of the foreclosure by in-sourcing their expenses to affiliates at abovemarket rates. 28. Citi generates substantial revenues and profits, including unlawful fees,
penalties, and charges collected from consumers whose mortgage and home loans it
Katherine M. Porter, Misbehavior and Mistake in Bankruptcy Mortgage Claims, 87 TEX. L. REV. (2008).
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services. The fees improperly charged and collected are in practice and practical effect undisclosed finance charges, late fees, inspection fees, prepayment penalties, recording fees, foreclosure costs, and other miscellaneous fees and costs. Imposition of these fees and capitalizing arrears results in an increase of the principal balance and servicing compensation. 29. Therefore, Citi benefits from maintaining borrowers in default and
initiating foreclosure proceedings. 30. According to the annual reports filed with the SEC, Citis Master Servicer
Revenues ("MSR") for the years ended December 31, 2010, 2009, 2008, 2007 and 2006 were as follows: In millions of dollars 2010 Servicing fees $1,356 Late fees 87 Ancillary fees 214 Total MSR fees $1,657 31. 2009 $1,635 93 77 $1805 2008 $2,121 123 81 $2,325 2007 $1,683 90 61 $1,834 2006 1,036 56 45 $1,137
Thus, it is evident from the above chart that although Citi s portfolio of
mortgages has decreased since 2008, its late fees and ancillary charges have increased significantly in proportion to the mortgages being serviced. 32. As detailed below, during this spurge of foreclosure activity, with the
intent to increase its revenues, Citi has indulged in a variety of abusive servicing practices, including improper foreclosures or attempted foreclosures, imposition of improper fees, especially late fees, forced-placed insurance that is not required or called for, and misuse of escrow funds. Citi has also breached its obligations to Plaintiff and Class Members by misrepresenting and/or failing to disclose the nature and scope of its egregious loan processing errors.
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By this action, Plaintiff and Class Members seek restitution of all
fraudulent and illegal payments collected by Citi and damages, and declaratory and injunctive relief for all violations of state and federal law enumerated below.
The Foreclosure Crisis
34.
During 2007 and 2008 the nation saw the meltdown of the real estate
market. This resulted in an unprecedented number of foreclosure proceedings being filed throughout the country. 35. Since mid-2007, around ten million homes entered foreclosure. Over four
million borrowers lost their homes in foreclosure, and another 2.5 million are currently scheduled to lose theirs. 2 The nation is now in its fifth year of the foreclosure crisis, and there is no end in sight. 36. Over a million homes entered foreclosure in 2007 and another two million
in 2008. Half of a million homes were actually sold in foreclosure or otherwise surrendered to lenders in 2007, and over seven hundred thousand were sold in foreclosure in the first three quarters of 2008. In 2009, an additional 2.8 million homeowners entered foreclosure, and a congressional oversight panel noted that one in eight U.S. mortgages was currently in foreclosure or default. 5 According to the Mortgage Bankers Association, as of June 30, 2010, 4.57% of 1-4 family residential mortgage loans (roughly 2.5 million loans) were currently in the foreclosure process, a rate more than
1d HOPE Now Data Reports. Mortgage Bankers Association, Press Release, Delinquencies Increase, Foreclosure Starts Flat in Latest MBA National Delinquency Survey, Dec. 5, 2008, athttp://www.mbaa.orgINewsandMedialPressCenterl66626htm . Written Testimony of Adam J. Levitin, Associate Professor of Law, Georgetown University Law Center before the United States House of Representatives Committee on the Judiciary, dated January 22, 2008, at http://judiciary.house.gov/hearings/pdf/Levitin09Ol22.pdf 5 Congressional at Oversight Panel, Oct. 9, 2009 report, available URLhttp://cop.senate.gov/press/releases/release-1 00909-foreclosure.cfm (last visited December 3, 2010).
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quadruple the historical average. 67 An additional 2,618,406 foreclosures were started and 1,069,867 foreclosure sales occurred from July 2010 to December 2010 alone. 8 37. Increased foreclosures have a detrimental effect on borrowers who are at
serious risk of losing their homes and have a negative impact on surrounding neighborhoods that suffer decreased property values and low tax revenues. Foreclosures damage credit, making it difficult for families to purchase another home or even rent another place to live in.
Congressional Response And Citis Obligations To Help Homeowners
38.
In 2007, as a result of irresponsible lending practices, Citi had to deal with
an unprecedented number of foreclosures. 39. In response to the financial crisis facing the country, on October 3, 2008,
Congress enacted the Emergency Economic Stabilization Act of 2008, Pub. L. No. 110343, 122 Stat. 3765 (codified as amended at 12 U.S.C. 5201-5261,31 U.S.C. 1105, and scattered sections of 26 U.S.C.) (the "EESA"). 9 Citi received $45 billion in federal funds under the TARP program. By accepting TARP payments Citi agreed to participate in one or more programs that TARP authorized the Treasury Secretary to establish necessary to minimize foreclosures. 40. On April 13, 2009, Citi signed a Servicer Participation Agreement
("SPA") with the Treasury Department, which Plaintiff incorporates herein by reference,
Moftgage Bankers Association, National Delinquency Survey. Written testimony of Adam J. Levitin on, "Problems in Mortgage Servicing from Modification to Foreclosure" dated November 16, 2010, before the Senate Committee on Banking, Housing, and Urban Affairs. 8 Now Data Reports. EESA authorized the Secretary of the Treasury to establish the TARP to "purchase, and to make and fund commitments to purchase, troubled assets from any financial institution..." 12 U.S.C. 5211. In exercising its authority to administer TARP, EESA mandates that the Secretary "shall" take into consideration the "need to help families keep their homes and to stabilize communities." 12 U.S.C. 5213(3).
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in which it agreed to comply with Home Affordable Modification Program ("HAMP") -a program under which Citi and other major mortgage services and lenders receive incentive payments for providing mortgage loan modifications to eligible borrowers such as Plaintiff and the putative class members. 41. By entering into the SPA, Citi covenanted that as a Participating Servicer,
it "shall perform" the activities described in the Program Documentation" "for all mortgage loans it services." Under the HAMP Program Documentation, Citi is required to follow a protocol to determine borrowers eligibility and modify mortgages of all eligible borrowers."
The SPA executed by Citi incorporates all "guidelines," "procedures," and "supplemental documentation, instructions, bulletins, letters, directives, or other communications," referred to as "Supplemental Directives" 10 issued by the Treasury, Fannie Mae or Freddie Mac, in connection with the duties of Participating Servicers. These documents together are known as the "Program Documentation." The Program Documentation includes the HAMP Handbook v.3 (and as updated/revised versions issued in 2011), the Frequently Asked Questions and waivers, and the Supplemental Directives issued from time to time. The RAMP Program Documentation requires Citi, as Participating Servicer, to evaluate all loans that are delinquent 60 days or greater for HAMP modifications. In addition, if a borrower contacts Citi regarding a RAMP modification, Citi must collect income and hardship information to determine if HAMP is appropriate for the borrower. Thus, the HAMP protocol starts with homeowners providing the lender with required documentation and information. On receipt of all documentation, as HAMP servicer, Citi must determine 31% of the homeowners gross income and must then follow a three-step process to reduce the monthly payment to that 31% amount. These steps include reducing the interest rate to as low as 2%, extending the loan terms up to 40 years and re-amortizing the loan (if necessary), and finally deferring a portion of the principal if necessary until the loan is paid off. This process is known as the "Standard Waterfall." Servicers must reduce payments in the precise manner specified by the Standard Waterfall, starting with reducing the interest rate on the mortgage. All loans that meet the HAMP eligibility criteria and are either deemed to be in imminent default (as described above) or 60 or more days delinquent must be evaluated using a standardized NPV test that compares the NPV result for a modification to the NPV result for no modification. SD 09-01. This NPV test compares the net present cash flow from these modified loan terms to the net present value of the loan without modification. See SD 09-01 at 4-5. If the expected value to the lender of the loan after a HAMP modification exceeds the expected value of the same loan to the lender if it is not modified, then the NPV test result is positive and the servicer must modify the loan. Home Affordable Modification Program, Base Net Present Value (NPV) Model Specifications updated June 11, 2009. Once a borrower is pre-qualified as required under HAMP rules, as HAMP servicer, Citi must offer the borrower a trial period agreement. If a borrower has complied with the terms of the trial period of making timely trial payments and furnishing income documentation, then Citi must provide a permanent modification. Specifically HAMP regulations state: "Borrowers who make all trial period payments timely
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HAMP rules and directives create explicit rules regarding timelines for the
HAMP modification program. Timing is of the essence in the servicers processing of borrowers modification requests and evaluating eligibility for a permanent modification. HAMP rules require that servicers evaluate the income documentation submitted "upon receipt" and no later than 30 days. See HAMP FAQ at 5; SD 09-07 at 1. In all cases, servicers are also directed to prepare the permanent HAMP modification agreement early enough to allow processing time for the modification to become effective on the first day of the month following the final TPP payment. See SD 09-03. 43. Citi failed to comply with these HAMP mandates. Instead of determining
Plaintiff and Class Members eligibility in a timely manner as required, Citi has delayed the process. This delay increases the delinquent amounts payable by Plaintiff and Class Members, resulting in increase of the interests, principal balance and other fees and charges for Citi. 44. modifications. . Both during the time the borrower is being evaluated for a permanent modification and during the trial period, any foreclosure action will be temporarily suspended. However, pursuant to HAMP, should the modification fail, banks and lenders are required to consider other programs before foreclosure, including but not limited to short sales HAMP directives mandate specific protections for borrowers applying for
and who satisfy all other trial period requirements will be offered a permanent modification." Id. (emphasis added).
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and deed in lieu of debt. In the event that the HAMP or alternative foreclosure prevention options fail, the foreclosure action may be resumed. Servicers cannot force borrowers to waive their legal rights, or demand certain fees from them. SD 09-01 at 14. Servicers must waive any late fees upon completion of the 90-day trial period if the borrower successfully completes the trial. SD 0901 at 22. Servicers may not charge the borrower to cover the administrative processing costs incurred in connection with a HAMP, and must pay any actual out-of-pocket expenses such as any required notary fees, recordation fees, title costs, property valuation fees, credit report fees, or other allowable and documented expenses. SD 09-01 at 22. Finally, servicers are required to report a "full file" status report to credit reporting agencies while they evaluate borrowers for eligibility during the trial period. For borrowers who are current when they enter the trial period, the servicer should report the borrower current but on a modified payment if the borrower makes timely payments by the 30th day of each trial period month at the modified amount during the trial period, as well as report the modification when completed. SD 09-01 at 22. 45. As set forth below, Citi has and continues to routinely fail in meeting its
obligations under the SPA and Program Directives. As aptly stated by Julia Gordon in her Congressional testimony, "[s]ervicers have routinely failed to follow the loss 15
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mitigation guidelines contained both in the HAMP program and in the contracts of investors..., and the dual-track system of loss mitigation while also proceeding to foreclosure has resulted in foreclosures taking place before evaluation for loan modifications or other alternatives has occurred, while that that process is occurring, or even after a successful modification agreement has already been reached." Written Testimony of Julia Gordon, Center for Responsible Lending, Before the U.S. House of Representatives Subcommittee on Housing and Community Opportunity of the Committee on Financial Services, November 18, 2010, at 2 (hereinafter, "Gordon Congressional Testimony").
Citis Loan Modification Program: Citi Actively Solicited Borrowers To Get Loan Modifications
46.
Citi aggressively solicited its borrowers to apply for modifications through
various advertisements and representations. 47. In a November 11, 2008 press release, Citi "announced a series of
initiatives designed to proactively help potential at-risk borrowers remain current on their payments and ultimately in their homes." Among the initiatives were Citi launching a Homeowner Assistance program and extending Citi s moratorium practice. Citi also claimed that it "streamlined its existing loan modification program." 48. In a March 3, 2009 press release, Citi claimed to have rolled out an
"innovative initiative" whereby an unemployed homeowner could make significantly lowered mortgage payments for a three-month period. Within the same timeframe, the average length of unemployment in the United States was nearly six months. 49. Citi is a founding member of the "Hope Now" alliance, and touts its
ability to help homeowners stay in their homes when "life happens."
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Citi advertised its various homeowner assistance programs on its website,
including HAMP and Citis own proprietary modification program. 51. Citi describes the loan modification process as follows on its website: Modification. Sometimes, if your income or financial circumstances change long-term, you may be unable to pay your existing monthly mortgage payments on an on-going basis. While you may not be able to refinance your mortgage, you may qualify for a mortgage modification. An example of a modification program is the recently introduced government program- the Home Affordable Modification Program, or HAMP. In addition to this program, there are similar lender-specific programs which CitiMortgage may be able to offer you if you do not qualify for HAMP. Seehttps ://www.citimortgage.comlMortgage/displayHomeOwnerAssistance.do?page=tro ublepayment (last visited August 30, 2011). If you are having trouble making payments on your mortgage, CitiMortgage will work with you to find a mortgage solution. We also have options if you are currently facing foreclosure. Seehttps ://www.citimortgage.comlMortgage/displayHomeOwnerAssistance.do?page=ove rview (last visited August 30, 2011). To apply for a modification under HAMP, you must: Be the owner-occupant of a one- to four-unit home. Have an unpaid principal balance that is equal to or less than: 1 Unit: $729,750 2 Units: $934,200 3 Units: $1,129,250 4 Units: $1,403,400 Have a first lien mortgage that was originated on or before January 1, 2009. Have a monthly mortgage payment (including taxes, insurance, and home owners association dues) greater than 31% of your monthly gross (pre-tax) income. Have a mortgage payment that is not affordable due to a financial hardship that can be documented.
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If you answered YES to all of these questions, you may be eligible for a modification under HAMP. Only your servicer will be able to tell you if you qualify. Seehttps ://www.citimortgage.comlMortgage/displayHomeOwnerAssistance.do?page=tro ublepayment_3 (last visited August 30, 2011). 52. Regarding the HAMP program, Citi also advertized that: Citi believes the approach to loan modifications under the Administrations Homeowner Affordability and Stability Plan will help keep borrowers in their homes, forestall foreclosures and stabilize communities around the country. We are also confident that this new approach will streamline servicers ability to make loan modifications more effectively and efficiently. Citi Global Community Relations, SUMMARY of The American Recovery and Reinvestment Act and the Homeowner Affordability and Stability Plan, February 24, 2009 (Revised: March 4, 2009) 53. In an August 25, 2009 press release, Citi quoted Sanjiv Das, CEO of Citi,
who stated that: CitiMortgages main concern is to help as many of our distressed customers as we can with a solution that is appropriate for their individual financial circumstances and needs. We are encouraged by the success of our initiatives, and are dedicated to doing more. Many Americans are still struggling which is why Citi remains committed to working with home owners and partnering with national and local community leaders to provide the programs, resources, and information necessary to keep distressed borrowers in their homes. 54. According to Harold Lewis, the Managing Director of CitiMortgage and
Head of Citis Homeowner Assistance Program: [A]s the housing crisis worsened, Citi s main focus has been to work with borrowers to keep them in their homes... That has always been our first priority.
We believe it is our responsibility to help American families in financial distress, and in particular, to help families stay in their homes. We remain committed to helping borrowers facing hardship. 18
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Written Testimony of Harold Lewis, Managing Director, CitiMortgage, Before the Committee on Financial Services, Subcommittee on Housing and Community Opportunity, November 18, 2010, at 2 and 3 (hereinafter, "Lewis Congressional Testimony"). 55. Citi further advertized that a distressed borrower, who is in danger of
defaulting upon their loan, can negotiate a proprietary loan modification with Citi. Citi will send the borrower a modification package which requires the borrower to fill out paperwork and supply certain proofs. 56. Loan modifications, by which mortgage servicers change the terms of
borrowers mortgage terms, have been a cornerstone of public and private efforts to preserve home ownership in the recent financial crisis. Through the modification process, servicers reduce borrowers interest rates, extend their loan terms, and/or forgive or forbear principal in order to reach a monthly mortgage payment that borrowers can afford. 57. In a March 4, 2010 press release which recounts the prepared testimony of
Mr. Vikram Pandit, Chief Executive Officer of Citigroup, before the Congressional Oversight Panel, Mr. Pandit stated that "Citi today is fundamentally different from the company we inherited when I became CEO two years ago." Mr. Pandit stated: "[w]ith regard to financial institution reform, we at Citi believe that banks should operate as banks, focused completely on serving their clients," and "[w]ith regard to consumer market reform, a key lesson of the financial crisis is that what starts as an issue that affects consumers can become an issue for the entire financial system. Recent experience reinforces the truism that what is best for consumers is also best for the financial system and the economy."
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58.
In response to Citis numerous solicitations, Plaintiff and Class Members
sought modification of their mortgage loans.

Citis Practices
59.
As noted above, Citi does not have any incentive to modify the mortgage
loans. If a servicer modifies a loan in a way that reduces monthly payments, the servicer will have a reduced income stream itself. This reduced income stream will only last as long as the loan is in the servicing portfolio. Thus, when a servicer modifies a loan, the servicer loses servicing and float income (which it will not have long into the future anyhow) and incurs expenses. Because of this Citi and other servicers are reluctant to modify a mortgage loan. Moreover, loan servicers, like Citi, who fail to modify mortgage loans, face few consequences. 60. To further its profits, after aggressively soliciting its borrowers to apply
for modifications under HAMP through various advertisements and representations, Citi engaged in a scheme to capitalize arrears to increase principal balances, create additional float income by putting borrowers in foreclosures, short sales, or refinance of their mortgages, maintain borrowers in default, delay decisions on modifications and fail to apply their mortgage payments towards the homeowners accounts by keeping them in suspension accounts, so that Citi can generate income through imposition of late fees, delinquency fees, inspection fees, recording fees, appraisal fees etc., and impose junk fees" for unnecessary work or for work that was simply never done or padding the costs by in-sourcing their expenses to affiliates at above-market rates. a. 61. Citis Charging/ Collecting Excessive Fees and Costs To maximize its profits, Citi manages and administers its residential
mortgage servicing tasks through the use of general computer software programs with
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little or no human intervention. Entries on the loan accounts serviced by Citi are tracked by a licensed computer software program. When payment is received for a mortgage loan account from a borrower, that payments are entered into the software program and deposited. The computer software then applies the payments towards the homeowners accounts. 62. Citi regularly conducted its mortgage servicing by designing, operating,
and managing the computer software to intentionally charge borrowers unreasonable, improper and unlawful fees. 63. Citis software program applies computer logic to certain events,
triggering automatic action on the loan file. More particularly, guidelines for the management of loans serviced by Citi - e.g. late fees, delinquent fees - are imported into the computer softwares internal logic and automatically apply. Other charges and fees, such as fees for property inspections, are assessed against the account by virtue of "wrap around" software maintained by Citi. 64. Thus, if a borrower is late in making a payment or Citi is tardy in
recording receipt of the payment, the computer system automatically charge late and delinquency fees and generates an order for property inspection and charges the borrowers account for this inspection after the loan has been in default for a certain number of days regardless of whether there is a reasonable need for inspection or whether Citi was tardy in applying the payment towards the homeowners account. 65. Citis computer generates late fees, delinquency charges and orders for
inspection, appraisal of property, recording of title etc. without human intervention. No person or employee of Citi is involved in the determination of whether inspection is reasonably necessary to protect the lenders interest in the property. 21
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Instead of being placed on reasonable parameters, the computer system is
programmed to access as many charges as possible and pay first the outstanding fees and costs before satisfying interest and principal. 67. For example, the computer system transmits property inspection work
orders to one of the approved vendors with which Citi has an agreement, if the borrower has been in default for 20 to 45 days. Once the approved vendor receives the computer generated work order, the inspection is performed and the cost is charged to the borrowers account. After the first inspection is triggered by a default, the Citi computer system will continue to order property inspections every 20 to 45 days until the default is cured. Even when the borrower only misses one payment, and is current on all subsequent payments, the computer will automatically trigger the inspection work order and charge the borrower every month. Further, because the property inspections are ordered based on a computer program rather than human decision-making, property inspections may be performed on a borrowers property regardless of the fact that the property has already been inspected numerous times and was previously deemed occupied, well-maintained and in good condition. Thus, homeowners like the Plaintiff are charged for numerous homeowner inspection work orders. 68. Moreover, the limited nature of the inspection orders, which are merely
"drive through" inspections, to ostensibly assess whether the house is occupied, being maintained, and has not been damaged, provide little, if any, real opportunity to determine whether the lenders interest in the property is at risk. Indeed, Citis inspectors do not read the inspection reports. Rather, these files are stored in the property management department and not reviewed by anyone.
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Similarly, Citi s computer program does not take into account the fact that
the monthly mortgage payments received are being placed in a suspension account, and will trigger default and foreclosure related fees and costs even if the borrower is current on the mortgage. Indeed, Citi has also misused the escrow accounts and suspense accounts during the loan modification process - and this has resulted in significant increase of the late fees, delinquency fees, inspection fees, and other foreclosure related charges. Plaintiffs claim is typical in this regard. Although Plaintiff has been making timely monthly mortgage payments and is current on his mortgage, Citi has issued notice of default and intent to foreclose and also collected and/or seeks to collect excessive fees and costs to which it is not entitled. 70. Citi s practices with respect to property inspection, late fees, delinquency
fees, and other foreclosure related charges are also in stark contrast to the Federal Housing Administrations guidelines for property inspections on homes that are federally insured. For example, FHA guidelines provide that a mortgage servicer should perform and can be reimbursed for one initial property inspection that should be calculated if a mortgagors payment is not received within 45 days of the due date and efforts to reach the borrower by telephone are unsuccessful. If the initial property inspection reveals that the property is occupied or if occupancy is confirmed through another method (i.e. the borrower makes a payment or contract is made by a telephone), FHA guidelines state that the mortgagor servicer will not be reimbursed for any additional inspections and additional inspections are not required. Citi allows property inspections to be conducted every 20 to 45 days until a borrower cures a default regardless of whether the previous inspection revealed that the house was occupied and well maintained.
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71.
To similar affect are the other work order and charges such as delinquency
charge, higher insurance recommendation and charge, escrow delinquency fees, recording fee, and other foreclosure related fees and expenses. Most of these charges show up as "other charges" or "miscellaneous charges" on the account statements. 72. These computer-generated orders for inspection, appraisal, title recording,
etc. are excessive and unreasonable and confer no benefit on Citi, and serve no discernable function other than to generate revenue for Citi is further evidenced by the limited nature of the inspections themselves. The property inspections are mere "driveby" inspections, i.e., the inspector "drives by" the property ostensibly to access whether the house is occupied, being maintained, and has not been damaged - a practice that provides little, if any, real opportunity to determine whether the lenders interest in the property is at risk. Indeed, Citis personnel do not read the inspection reports. Rather, electronic files of property inspections are never read by anyone at Citi. 73. Citi has also misused the escrow accounts and suspense accounts, and this
practice exasperated during the loan modification process - and this has resulted in significant increase of the late fees, delinquency fees, inspection fees, and other foreclosure related charges. 74. Upon information and belief, Citis corporate policy fails to notify
Plaintiffs and Class Members that fees, costs, or charges are being assessed against their accounts. The failure is fatal to Citi s decision to pay itself from payments sent by Debtors for other purposes and is contrary to the requirements of the Note and Mortgage, the terms of which are incorporated herein by reference.
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75.
Citis software program is not tied to Plaintiff or Class Members
mortgage agreements, but was designed to operate in a centralized fashion to defraud thousands of borrowers that had their mortgage serviced by Citi. 76. Plaintiffs claim is typical of the class members. In August 2010, in
August 2010, Goodyk paid $1,363.80 in late charges, $138.00 for inspection fees, $84.00 for BPO appraisal, $0.87 for servicing fee, and $1,130 for legal fees and costs, in addition to the mortgage payments. 77. In order to maximize its revenue, Citi also imposes an additional $10
charge for payment over the phone upon Plaintiff and Class Members who have no bargaining power or leverage - and as charges Plaintiff and Class Members for sums which are not permitted by the original mortgage agreement. 78. Plaintiff and members of the proposed Class have been charged late fees
and other undisclosed fees even while they are making regular monthly payments. Plaintiff and Class Members have also been persuaded to "agree" to pay unreasonable fees that only enrich Citi, such as fees for telephone payments, which, on information and belief, further enrich Citi at the expense of mortgagors. Plaintiff and Class Members have been charged excessive interest on principal amounts for which Citi refused to apply payments in a timely manner, adding substantially to mortgagors overall debt. 79. By failing to apply the mortgage payments to Plaintiff and Class members
accounts, Citi s computer program automatically charges late fees, delinquent fees, finance charges, and other foreclosure related fees and undisclosed charges. Imposition of these illegal fees and capitalizing of unaccounted mortgage payments has resulted in an increase of the interest payments, principal balance and servicing compensation for Citi. 25
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80.
This practice of charging illegal fees was particularly exasperated in the
recent mortgage foreclosure crisis of 2007. 81. As noted above, in a foreclosure action, Citi recovers all fees and expenses
off the top from foreclosure sale proceeds before mortgage backed securities investors are paid. This reimbursement structure limits Citi s incentive to rein in costs and actually incentives them to pad the costs of foreclosure. Citi s ability to retain foreclosure-related fees has even led it to attempt to foreclose on properties when the homeowners are current on the mortgage or without attempting any sort of repayment plan. As detailed below, Plaintiff and Class Members have paid significant fees and costs to avoid foreclosure proceedings. 82. Plaintiff and Class Members have suffered on account of Citis unlawful
foreclosure practices. 83. Specifically, and as discussed in detail below, Plaintiff Goodyk has a
principal and interest payment only mortgage account. After making a lump-sum payment in August 2010 (which was also illegally charged and is challenged herein), Goodyk has been current on all his original mortgage payments. However, Citi has not applied the mortgage payments against his monthly mortgage account, and instead has reported him delinquent to the credit agencies. 84. By failing to apply the mortgage payments to Goodyks account, Citis
computer program automatically charges late fees, delinquent fees, and other fees, finance charges, and other foreclosure related fees and undisclosed charges. Imposition of these illegal fees and capitalizing arrears, also results in an increase of the interest payments, principal balance and servicing compensation for Citi.
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The computer generated fees are unreasonable, confer no benefit on the
lender, and serve no discernable purpose other than to generate revenue for Citi. Citi repeatedly sent to Plaintiff and Class Members materially false and misleading agreements, contracts and monthly mortgage statements. Specifically, Citi conceals the nature of the improper and unlawful fees and charges from borrowers by listing them on the borrowers statement only as "other charges." 86. These illegal fees and charges are in practice and practical effect
undisclosed finance charges, late fees, inspection fees, escrow overdrafts, recording fees, foreclosure costs and other miscellaneous fees, including attorney fees. 87. Despite repeated requests, Citi refuses to make Plaintiff and Class account
current, and Plaintiff and Class Members have been asked to pay the afore-mentioned illegal fees and charges to avoid foreclosure proceedings. 88. Plaintiff and Class Members have suffered damages on account of Citis
unlawful foreclosure practices. Specifically, Plaintiff and members of the proposed Class have been charged late fees and other undisclosed fees even while they are making regular monthly payments. Plaintiff and Class Members have been charged excessive interest on principal amounts for which Citi refused to apply payments in a timely manner, adding substantially to mortgagors overall debt. Indeed, as enumerated below, Plaintiff has incurred significant fees and charges. 89. Indeed, as enumerated below, Plaintiff has incurred significant fees and
charges. In January 2011 Goodyk was informed that he is in default of his payments, and that his total loan payoff amounted to $206,695.54 an amount greater than his original
loan of $205,000 which was funded in November 2007 and upon which Plaintiff has made significant principal and interest payments. Goodyk was also informed that he 27
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owed Citi interest payments in the amount of $5,801.40, escrow overdraft of $1,860.00, late charges of $272.76, delinquency expenses of $144.10, and unsecured servicing fees in the amount of $0.87 when his payments were admittedly sitting in an unapplied or suspended fund account. 90. Goodyk was quite surprised to learn that he has an escrow delinquency,
when he has never had an escrow account for his mortgage, and that his mortgage payments have not been applied towards his account. Citi s representative Sareana, ID Number FN63 175 confirmed that his payments were sifting in an unapplied or suspended fund account. In the meantime, Goodyk is required to pay excessive fees and charges to avoid foreclosure proceedings. 91. In addition, Plaintiff and Class Members have suffered, among other
things, emotional distress, wrongfully being placed in imminent danger of losing their homes, impairment in their ability to sell their property, and attorneys fees in defending fraudulent foreclosures. Moreover, Plaintiff and Class Members have suffered damages, including, but not limited to, uncertainty of clear title, which causes a smaller pool of potential buyers, lowers home values, real estate owned sales resulting in higher deficiency judgment, and decreased time to negotiate a modification or workout of the loan. b. Ciiis Unlawful Foreclosure Practices During Loan Modification Process Citi scheme of charging illegal fees and costs has increased significantly
92.
since 2007 when on account of its irresponsible lending practices Citi had to deal with an unprecedented number of foreclosures and has been especially predominant during the loan modification process.
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93.
As demonstrated below, instead of providing timely permanent
modifications to eligible borrowers, Citi delayed the process, while capitalizing the arrears into the principal balance accounts, increasing interest charges, inspection fees, late and delinquent fees. Ultimately, instead of receiving the promised loan modification, Citi filed wrongful foreclosure actions, and Plaintiffs and Class Members were forced to pay these foreclosure fees to avoid losing their homes. In addition, Plaintiffs and Class Members incurred additional costs of engaging a foreclosure attorney to represent them in court. 94. According to a survey conducted by National Association of Consumer
Advocates, in conjunction with National Consumer Law Center, of attorneys representing homeowners in foreclosure pending nationwide, the foreclosures can be classified into the following categories: Homeowners who had been placed into foreclosure while awaiting a loan modification (which is 99% of the homeowners). Homeowner who had been placed into foreclosure despite making modified payments as required by the banks during the trial period plan (90% of homeowners). Homeowners had been placed into foreclosure due to a servicers improper failure to accept payments (87% of the homeowners). Homeowners had been placed into foreclosure as a result of forceplaced insurance alone, or on account of the impact of illegal fees and the misapplication of payments (50% of the homeowners). See, Written Answers from Diane E. Thompson, National Consumer Law Center, to Questions for the Hearing on "The Need for National Mortgage Servicing Standards" dated May 12, 2011. 95. These foreclosures are unlawful because they were either brought in
violation of the under the HAMP guidelines, while homeowners who were being 29
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evaluated for modification, or during the trial period plan, or were caused by Citi s unlawful practices of not misapplying the mortgage payments and charging excessive fees and costs. 96. As discussed below, Plaintiffs claims are typical in this regard.
Specifically, while Goodyk was trying to modify the terms of his mortgage and get a better interest rate than 7% presently being charged, Citi refused to accept his mortgage payments for the months of June and July 2010 and returned them with the notation that the account was in foreclosure and the payments were insufficient to satisfy the deficiency. By failing to accept and apply the June and July mortgage payments, Citi claimed that Goodyk was in default and brought an otherwise unlawful foreclosure action. As demonstrated below, under Federal Helping Families Save Their Homes Act of 2009 and the HAMP Supplemental Directives, Citi cannot file a foreclosure action against a borrower who has applied for a loan modification and whose eligibility is being considered. 97. Specifically, the Federal Helping Families Save Their Homes Act of 2009
(5. 896), effective May 20, 2009, provides, in pertinent part: TITLE IVFORECLOSURE MORATORIUM PROVISIONS SEC. 401. SENSE OF THE CONGRESS ON FORECLOSURES. (a) IN GENERAL.It is the sense of the Congress that mortgage holders, institutions, and mortgage servicers should not initiate a foreclosure proceeding or a foreclosure sale on any homeowner until the foreclosure mitigation provisions, like the Hope for Homeowners program, as required under Title II, and the PresidentsHomeowner Affordability and Stability Plan, have been implemented and determined to be operational by the Secretary of Housing and Urban Development and the Secretary of the Treasury. (b) SCOPE OF MORATORIUM.The foreclosure moratorium referred to in subsection
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(a) should apply only for first mortgages secured by the owners principal dwelling. Helping Families Save Their Homes Act of 2009 (5. 896), effective May 20, 2009 (emphasis added). 98. The HAMP Supplemental Directives, adopted on March 4, 2009 and inter alia, that:
supplemented on April 6, 2009 and November 30, 2009, require,
Any foreclosure action will be temporarily suspended during the trial period, or while borrowers are considered for alternative foreclosure prevention options. In the event that the Home Affordable Modification or alternative foreclosure prevention options fail, the foreclosure action may be resumed. 99. Notwithstanding the aforesaid, Citi routinely files foreclosure actions
against homeowners whose financial paperwork is being evaluated for modification purposes. 100. Here, Goodyk was being considered for loan modification at the time of
filing of foreclosure, and had been asked by Citi s representative to make trial payments of reduced amounts. Goodyk had indeed made modified payments in July and August 2010. 101. Unaware of the illegality of the foreclosure proceedings, and to avoid
losing his residence, in August 2010, Goodyk paid $1,363.80 in late charges, $138.00 for inspection fees, $84.00 for BPO appraisal, $0.87 for servicing fee, and $1,130 for legal fees and costs, in addition to the mortgage payments. Despite being current on his mortgage payments, Goodyk continues to incur illegal fees and costs on account of Citis unlawful practices. In the mean time, Citi continues to illegally capitalize the mortgage payments into the principal balance and increase its interest and servicing payments.
31
Case 4:11-cv-00443-RP -CFB Document 1 Citi Wrongfully Reports Borrowers as Delinquent to Credit Reporting Agencies
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C.
102.
In a further attempt to maximize its profits, Citi declares Plaintiff and
Class Members as delinquent to credit rating agencies. Thus, although Plaintiff and Class Members were making regular or modified payments an amount that will match their payments under a permanent modification or is the listed amount under the original mortgage - their accounts are not reported as current to credit scoring agencies. Thus, Citi has engaged in a practice of reporting even homeowners who are making full payments of their mortgages as delinquent to the credit agencies by failing to timely apply their payments towards their accounts and/or maintaining their mortgage payments in separate suspension accounts. As demonstrated below, Plaintiffs case is typical in this regard. 103. These false credit reports make it harder and more expensive for
consumers to obtain credit. In addition, misrepresenting the delinquency status of consumers loans allows Citi to impose late fees and other charges that are excessive and/or inadequately disclosed and are wholly unexplained "other fees" or "other charges", making it even harder for Plaintiff and Class Members to remain or become current on their mortgages. 104. These fees and penalties would not have been imposed on, or paid by,
Plaintiff and Class Members, had Citi properly accounted for their monthly mortgage payments in a timely manner. Also, by lowering the credit reporting of its customers, Citi is able to deny modifications to eligible homeowners since this is one of the criteria of the NPV test. In addition, Citi is able to charge higher default interest rates by lowering the credit scores of its customers.
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105.
Citi s action of wrongfully declaring the homeowners as delinquent to
credit agencies is violative of the Fair Credit Reporting Act and the Fair Debt Collection Practices Act ("FDPCA"), 15 U.S.C. 1692e(2)(A) & (8). In addition, the HAMP Program Guidelines require Citi to report borrowers who were previously current when they entered the trial period as "current but on a modified payment." HAMP FAQs, Q2004 at 20. However, Citi improperly reports such borrowers as delinquent. d. Citi s Intentional Misrepresentations and Delay in the Mortgage Loan Modification Process Citi has repeatedly breached its obligations to Plaintiff and Class Members
106.
and deceived homeowners about the loan modification process. Citis deceptions and omissions include, but are not limited to, the following: (1) Citi would make prompt decisions on modifications on quickly access the Plaintiff and Class Members for loan modification; (2) Citi would not foreclose upon consumers homes while modification requests were pending or while homeowners were making trial modification payments; (3) Citi would convert consumers to permanent modifications if and when they made the payments required by trial modification agreements, (4) Citi will do its best to help the homeowners reduce their payments and their mortgages, and keep their homes. 107. Citi has engaged in a pattern and practice of soliciting Plaintiff and Class
Member to seek a modification of their mortgage loan. During this process, Citi first seeks all financial information from Plaintiff and Class Members in order to determine how best to modify their mortgage loan, and whether Plaintiff and Class Members are qualified for the HAMP program. Citi promises that its customers that they will not be foreclosed during the modification process or while their paperwork was being evaluated by Citi for a modification.
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108.
Notwithstanding these promises and in violation of the HAMP guidelines,
if the borrower is delinquent or in imminent default, Citi refuses to accept the original mortgage payments and returns the same to Plaintiff and Class Members, while still evaluating their paperwork. Thereafter, Citi initiates foreclosure proceedings against Plaintiff and Class Members and reports them as delinquent to the credit reporting agencies. 109. While defending the foreclosure action, Plaintiff and Class Members are
informed that they are eligible and pre-qualified for a HAMP modification, and will receive a permanent modification agreement if they make timely modified trial payments under the trial period, and submit requested paperwork. Citi promises to provide the permanent modification agreement to Plaintiff and Class Members at the end of the three month trial period or within one month thereafter. 110. Citi then delays the modification of the mortgages and blames most of the
delays in processing loan modification requests on customers failure to provide required documentation. Citi has engaged in a pattern and practice of routinely claiming that it has not received a borrowers paperwork, or that it was lost. Yet, Citi rarely sends consumers written notification that documents are missing, and often fails to notify consumers orally that documents are missing. 111. Plaintiff and Class Members have experienced a remarkably uniform
pattern of repeatedly sending the same documents to Citi, receiving confirmation that documents are received and adequate, and then being told that the documents are lost, missing, incomplete, or otherwise defective. 112. After delaying the process of loan modification for months, Citi repeatedly
and inappropriately demands that borrowers update their application materials, while 34
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warning homeowners that their modification is at risk and threatening to deny the modification if they fail to comply with these requests. Typically, Citi requests the same document(s) over and over. Citis demands that borrowers submit duplicative or unnecessary documentation creates opportunities for Citi to reject otherwise eligible borrowers for permanent modifications. The requests for documents are unnecessary, duplicative, burdensome, and harassing. 113. Citis delay in providing a permanent loan modification has serious
consequences. Citi "recapitalizes" the unpaid loan balance at the end of the three month trial period by adding the difference between the original mortgage and the modified mortgage to the new principal balance. Because Citi s servicing fees is directly proportionate to the outstanding principal loan balances of the mortgages it services, Citi deliberately delays the permanent modification so that it could substantially increase the unpaid principal balance amounts by extending the trial period. 114. Relying on these representations, Plaintiff and Class Members make the
modified payments with the hope of receiving a permanent modification. 115. To further frustrate Plaintiff and Class Members, Citi then demands
balloon payments from Plaintiff and Class Members claiming that they need to be current on their mortgage in order to receive a modification. 116. After receiving the modified and balloon payments, instead of showing the
Plaintiff and Class Members as current, Citi fails to reflect the receipt of the payments towards Plaintiff and Class Members accounts, and keeps the same in a suspension account. This failure to reflect the payments received against the mortgage account triggers the computer software charging automatic delinquency fees, late fees, inspection fees etc.
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Citi has been charging/demanding and collective excessive and illegal late
fees, delinquency fees, inspection fees, appraisal fees, escrow delinquency fees, title fees, recording fees, process servicing fees, other servicing fees, miscellaneous fees and other foreclosure related fees and expenses from Plaintiff and Class Members. As demonstrated below, Plaintiffs experiences are common to the entire class, and Citi has collected significant illegal fees and charges from the Plaintiff. 118. After increasing the principal balance amounts to sums greater than the
original mortgage, instead of providing promised permanent modification agreement, Citi demands balloon payments of the outstanding loan amounts to avoid foreclosure proceedings. Indeed, as demonstrated below, Plaintiff was informed that his outstanding total loan payoff amounted to $206,695.54 - an amount greater than his original loan of $205,000 which was funded in November 2007 and upon which Plaintiff has made significant principal and interest payments. 119. Citi reports these borrowers, who were making modified payments during
a trial period, as late or in default to credit bureaus. As a result, Plaintiff and Class Members credit scores have been detrimentally affected, and significantly so, which substantially and negatively impacts their ability to rent if they lose their homes, among other problems. 120. Citi has engaged in a practice of failing to adhere to its trial period
agreements by negligently and/or recklessly rejecting loan modification applications and/or treating Plaintiff and Class Members as being in default of their loans by not applying the payments received against their accounts, notwithstanding that Plaintiff and Class Members tendered the mortgage payments on a timely basis, which Citi accepted.
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Citi has a duty of honesty and disclosure to borrowers with respect to processing loan modification applications, settlements, and foreclosures. 121. Plaintiff and Class Members reasonably and actually relied on Citis
representations with respect to suspending or reducing payments during the loan modification applications process. 122. Homeowners like Plaintiff and Class Members, who are denied a
modification after making several months of trial payments, are worse off than if they had never started the trial at all, because the process damages their credit scores and they have expended funds which could have been used for other purposes. 123. at hand. 124. Citi and its authorized agents made the previously described material Citi s misrepresentations and omissions were material to the transactions
misrepresentations and/or omissions with the intent and purpose of misleading borrowers, including Plaintiff and Class Members. Citi knew or should have known that its representations regarding the status of Plaintiffs and Class Members loans, as well as the status of any purported modification were inaccurate and that Plaintiff and Class Members would act in accordance with and in reliance on Citi s representations. 125. Citi s omissions and misrepresentations were made with the knowledge of
their falsity, or with utter disregard and recklessness as to whether they were true or false, with the intent of inducing Plaintiff and Class Members into relying upon them. 126. Citi has a financial interest in avoiding loan modifications and keeping
mortgages in default in part because doing so generates more fees than modifying a loan to decrease its principal. Citi was motivated by the foregoing.
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127.
Had Citi provided Plaintiff and Class Members with accurate information
regarding the status of borrower loans, purported defaults, and what measures could be taken to cure the defaults or modify the loans, Plaintiff and the Class Members would have pursued other measures to cure a potential default, would not have defaulted, and/or would not have been led to believe that Citi would assist the Plaintiff and Class Members in order to avoid default and be able to keep their homes. Had they known they would lose their homes despite making payments, Plaintiff and Class Members would have sought alternative help, might have sought short sales or other foreclosure alternatives, or simply allowed their homes to be foreclosed, saving the money from the additional payments for other necessary expenses. Other consumers lost willing buyers who could have mitigated their own (and Citis) financial losses by stepping in to purchase their homes. 128. As a direct and proximate result of Citis misconduct, Plaintiff and Class
Members have suffered damages. Specifically, Plaintiff and Class Members have suffered, among other things, emotional distress, wrongfully being placed in imminent danger of losing their homes, harm to their credit scores, depressed home values, impairment of the ability to sell their property, attorneys fees involved in defending the fraudulent foreclosure proceedings and illegal fees and charges. Moreover, Plaintiff and Class Members have suffered damages, including, but not limited to, uncertainty of clear title, which causes a smaller pool of potential buyers, lower home values, real estate owned sales resulting in a higher deficiency judgment, and decreased time to negotiate a modification or workout of the loan.
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Experience of the Named Plaintiff 129. Plaintiff incorporates by reference all the allegations made hereinabove to
his experiences listed below. The experiences of the Plaintiff are typical of all Class Members. Keith Goodyk 130. Plaintiff, Keith Goodyk, is a single person and currently resides at 1262
Iowa Street, Pella, Marion County, Iowa 50219. 131. On November 13, 2007, Mr. Goodyk obtained a residential mortgage from
CitiMortgage for his residence set forth above in the amount of $205,000.00. A copy of the mortgage and note is attached herewith as Exhibit A. 132. In accordance with the terms of the note, Mr. Goodyk made timely
payments of $1,363.87 (representing principal and interest only) until Spring of 2010 when he began to fall behind on his home payments. However, Mr. Goodyk continued to make his payments. 133. Mr. Goodyk then began working with Citi Mortgage to obtain a loan
modification, after having received communications about Citi and its loan modification programs and sent his financial information for consideration for a loan modification. 134. During this time, Mr. Goodyk made a full loan payment of $1,363.87 on
June 25, 2010 by check #22908. 135. Mr. Goodyk made another full loan payment of $1,363.87 on July 7, 2010
by check #22925. 136. Mr. Goodyk had every reason to believe that these two (2) mortgage
payments had been received and applied accordingly.
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At the same time that he was making full payments on his loan, Mr.
Goodyk continued working with Defendants telephone customer service representatives in order to take those steps necessary to obtain a permanent loan modification. 138. After his second full loan payment on July 7, 2010, Mr. Goodyk received
letters dated June 30 and July 28, 2010 that returned the above loan payments because they were insufficient to cure his delinquency and alerting him that his loan was in foreclosure. Copies of these letters are attached hereto as Exhibit "B". 139. Notwithstanding that he was working towards obtaining a permanent loan
modification, Citi initiated foreclosure proceedings against Mr. Goodyk on or about July 20, 2010 in Marion County, Iowa. 140. July 23, 2010. 141. On July 29, 2010, a telephone customer service representative of Citi Mr. Goodyk was served with Notice of the Foreclosure proceedings on
advised Mr. Goodyk that in fact he did qualify for the three-month trial loan modification program and, pursuant to the representatives instructions Mr. Goodyk made a modified payment by telephone in the amount of $1,156.91, plus a $10.00 phone payment fee. In addition to principal and interest, this sum also included Mr. Goodyks real estate property taxes and insurance payments. 142. The real estate property taxes and insurance were not previously part of
Plaintiffs original principal and interest payment of $1,363.87. Mr. Goodyk was told that if he would continue to make the three trial payments of new reduced amounts, which included real estate property taxes and insurance payments, he will receive a permanent modification that will his total monthly payment for same by approximately $700.00. 40
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Mr. Goodyk also received a July 29, 2010 notice of pay-off for
reinstatement of all past amounts due, by fax on August 3, 2010, from the attorneys representing Citi in the foreclosure action. A copy of this facsimile is attached hereto as Exhibit "C". 144. Mr. Goodyk now was confused since he thought he was in a trial loan
modification period. Because of the foreclosure proceeding and uncertainty of the modification program, Mr. Goodyk hired an attorney. 145. Mr. Goodyks was told by with Citis agents that his July 29, 2010 phone
payment was part of a trial modification plan and that if he would continue to make a series of three modified payments, his mortgage terms would be permanently modified. Relying on these instructions, Mr. Goodyk made another modified payments of $1,166.91 in August 2010. 146. On August 26, 2010, Mr. Goodyk made a payment made a payment of
$9,536.02, payable to Citi. This payment was made pursuant to the notice of pay-off, which gave a break up of the amount due as follows: Total Payments Late Charges Inspections BPO Appraisal Servicing Fees Legal Fees & Costs TOTAL $6,819.35 $1,363.80 $ 138.00 84.00 $ .87 $ $1,130.00 $9,536.02
A copy of the attorneys letter enclosing this payment is attached hereto as Exhibit "D". 147. On August 26, 2010, Mr. Goodyk was told by a Citi representative that
payment of $9,536.02 reinstated his loan and made him current on his mortgage payments. Citi representatives told Mr. Goodyk that he could continue in Citi s loan modification program and make a payment of $322.09 in September 2010, as this was the 41
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only amount that he owed. Relying on these instructions, Mr. Goodyk made the said payment. 148. Thereafter, Citi told Mr. Goodyk that he had completed all his trial
payments successfully and will receive a permanent modification of his mortgage. 149. Thereafter, Mr. Goodyk, continued to make his full mortgage payments as
he had been making in the past under the original mortagage agreement, while waiting for the permanent modification agreement. Mr. Goodyk made a full October payment of $1,363.87. 150. Mr. Goodyk continued to make his monthly mortgage payments under the
terms of the original mortgage. Mr. Goodyk made one two-month payment for November and December in the full amount of $2,727.74 151. Mr. Goodyk, in January 2011, made another full payment in the amount of
$1,363.87 to Citi under the original terms and conditions, and continues to make the full mortgage payments till date. 152. Since he had not heard anything to the contrary, Mr. Goodyk continued to
believe that he will receive a permanent modified agreement. 153. On January 18, 2011, Mr. Goodyk called CitiMortgage Customer Service
to check the status of his loan and balance, and to find out when he will get the permanent modified agreement. Plaintiff first spoke with Citi representative, Sareana, ID Number FN63 175, who informed him that his loan was in foreclosure and that he was delinquent by the sum of $5,660.92 from October 1, 2010 to January 1, 2011. 154. Mr. Goodyk pointed out to Sareana that he had a confirmation of October
3, 2010 payment to Citi in the amount of $1,363.87, and that he could prove that he had
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made all his monthly mortgage payments. Sareana indicated that upon further research, the amount of $4,091.61 was sitting in an unapplied or suspended fund account. 155. On being asked why Citi had been accepting but failing to apply his
payments and Sareana answered, "Thats a good question." 156. Mr. Goodyk attempted to determine the status of his account and his status
in the loan modification program, but was unable to receive confirmation from Sareana that he had completed the program successfully. She noted that he needed to talk to his loan counselor, Tiffany. 157. According to Sareana, it appeared from Tiffanys file notes that Mr.
Goodyk needed to provide one more piece of information for Citi to complete his loan modification. 158. Mr. Goodyk asked Sareana for confirmation of the current balance or pay-
off of his loan was and she referred Mr. Goodyk to the foreclosure department. 159. A Customer Service Representative in the foreclosure department told Mr.
Goodyk that his original loan had been made in the amount of $205,000.00, which was funded on or about November 30, 2007. As of January 18, 2011, Plaintiffs total loan pay-off amounted to $206,695.54an amount greater than his original loan. 160. Mr. Goodyk inquired what the amounts were and how it could be possible
that his three years of making full payments, including the charges, penalties, interest, fees, etc., he could owe in excess of his original loan amount. He was told that he owed amounts including late charges, reinstatement fees and now an escrow deficiency. 161. Mr. Goodyk was again told that he needed to speak with Tiffany, his loan
counselor. After calling Customer Service once again, he was told by Customer Service that they could not give out Tiffanys direct number since it was not an 800 number. In 43
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addition, they could not give out her email address, but they would send her an email to once again have her call him. 162. Customer Service indicated that they had file notes indicating that Tiffany
last tried to contact Mr. Goodyk on his cellular phone on November 30, 2010. However, Mr. Goodyk does not recall ever receiving a telephone call, nor did he ever receive a voice mail on his cell phone. Indeed, Plaintiff believes that no such call was ever sent to his cell phone. 163. On January 18, 2011, Citi issued a payoff statement to Mr. Goodyk.
Pursuant to this statement, Mr. Goodyk owes the Citi the following payments: Principal Balance as of 09/01/10 Interest from 09/01/10 to 02/01/11 @7% Escrow Overdraft Late Charges Delinquency Expenses Total Secured by Mortgage Total To Pay Loan in Full $198,904.61 $5,801.40 $1,860.00 $272.76 $144.10 $206,694.67 $206,695.54
A copy of this payoff statement is attached hereto as Exhibit "E". 164. On January 26, 2011, Mr. Goodyk received yet another notice of default
from Citi informing him that he was delinquent and must make payments of $5,728.24, including $272.78 in late charges. He was instructed that this payment must be made by February 26, 2011. In this letter Citi also informed Plaintiff that "[t]his is an attempt to collect a debt, and any information will be used for that purpose." A copy of this letter is attached hereto as Exhibit "F" 165. Upon information and belief, Plaintiff believes that Citi has misapplied his
payments to pay illegal fees and charges. 166. Plaintiff has been current on his mortgage since August 25, 2010, and has
been regularly making all mortgage payments under his mortgage and note. Yet, Citi has 44
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reported Plaintiff as delinquent to the credit agencies and is demanding late fees and delinquent fees. 167. Plaintiff has suffered damages as a result of Citis deceptive practices,
including but not limited to damages to his credit, having to defend against a wrongfully instituted foreclosure proceeding, illegal fees and charges which are being collected from his escrow account and emotional distress.
Class Action Allegations
168.
Plaintiff brings this suit as a class action on behalf of himself and all
others similarly situated (the "Class") pursuant to Fed.R.Civ.P. 23. Plaintiff seeks to represent the following Class: a. Class of all homeowners nationwide with mortgage loans serviced by Citi, and who, since April 2009 through the final disposition of this and related actions, (i) have entered into an oral trial period agreement with Citi and (ii) made all payments as required by their oral trial period agreement and complied with Citis requests for documentation, (iii) but have not received or have been denied a permanent Modification Agreement that complied with HAMP rules (the "Oral Modification Class"). b. Class of all homeowners nationwide with mortgage loans serviced, and who, since April 2009 through the final disposition of this and related actions, (i) have entered into an oral trial period agreement with Citi and made all payments as required by their oral trial period agreement and (ii) complied with Citis requests for documentation, (iii) but were improperly reported to credit reporting agencies as delinquent ("Credit Reporting Class"). c. Class of all homeowners nationwide with mortgage loans serviced, and who, since April 2009 through the final disposition of this and related actions, (i) have entered into an oral trial period agreement with Citi and (ii) made all payments as required by their TPP Agreement and complied with Citis requests for documentation, (iii) but were improperly placed in foreclosure and/or charged for various foreclosure-related fees ("Foreclosure Class").
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d. Class of all homeowners nationwide with mortgage loans serviced, and who, since April 2009 through the final disposition of this and related actions, (i) have entered into an oral trial period agreement with Citi and (ii) made all payments as required by their oral trial period agreement and complied with Citis requests for documentation, (iii) but were improperly but were charged for various fees, including foreclosure fees and costs (the "Fee Class"). 169. In the alternative, Plaintiff brings this suit as a class action on behalf of themselves and all others similarly situated pursuant to Fed.R.Civ.P. 23, within certain, but not all, of the United States, as may be more specifically identified in subsequent motions to certify a Class, defined as follows: a. Class of all homeowners within certain, but not all, of the United States, with mortgage loans serviced by Citi, and who, since April 2009 through the final disposition of this and related actions, (i) have entered into an oral trial period agreement with Citi and (ii) made all payments as required by their oral trial period agreement and complied with Citis requests for documentation, (iii) but have not received or have been denied a permanent Home Affordable Modification Agreement that complied with HAMP rules (the "Oral Modification Class"). b. Class of all homeowners within certain, but not all, of the United States, with mortgage loans serviced, and who, since April 2009 through the final disposition of this and related actions, (i) have entered into an oral trial period agreement with Citi and made all payments as required by their oral trial period agreement and (ii) complied with Citi s requests for documentation, (iii) but were improperly reported to credit reporting agencies as delinquent ("Credit Reporting Class"). c. Class of all homeowners within certain, but not all, of the United States, with mortgage loans serviced, and who, since April 2009 through the final disposition of this and related actions, (i) have entered into an oral trial period agreement with Citi and (ii) made all payments as required by their oral trial period agreement and complied with Citis requests for documentation, (iii) but were improperly placed in foreclosure and/or charged for various foreclosure-related fees ("Foreclosure Class"). d. Class of all homeowners within certain, but not all, of the United States, with mortgage loans serviced, and who, since April 2009
Mi
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through the final disposition of this and related actions, (i) have entered into an oral trial period agreement with Citi and (ii) made all payments as required by their oral trial period agreement and complied with Citis requests for documentation, (iii) but were improperly but were charged for various fees, including foreclosure fees and costs (the "Fee Class"). 170. In the alternative, Plaintiff brings this suit as a class action on behalf of himself and all others similarly situated within the State of Iowa, pursuant to Fed.R.Civ.P. 23, defined as follows: a. Class of all Iowa homeowners with mortgage loans serviced by Citi, and who, since April 2009 through the final disposition of this and related actions, (i) have entered into an oral trial period agreement with Citi and (ii) made all payments as required by their oral trial period agreement and complied with Citis requests for documentation, (iii) but have not received or have been denied a permanent Home Affordable Modification Agreement that complied with HAMP rules (the "Oral Modification Class"). b. Class of all Iowa homeowners with mortgage loans serviced, and who, since April 2009 through the final disposition of this and related actions, (i) have entered into an oral trial period agreement with Citi and made all payments as required by their oral trial period agreement and (ii) complied with Citis requests for documentation, (iii) but were improperly reported to credit reporting agencies ("Credit Reporting Class"). c. Class of all Iowa homeowners with mortgage loans serviced, and who, since April 2009 through the final disposition of this and related actions, (i) have entered into an oral trial period agreement with Citi and (ii) made all payments as required by their oral trial period agreement and complied with Citis requests for documentation, (iii) but were improperly placed in foreclosure and/or charged for various foreclosure-related fees ("Foreclosure Class"). d. Class of all Iowa homeowners with mortgage loans serviced, and who, since April 2009 through the final disposition of this and related actions, (i) have entered into an oral trial period agreement with Citi and (ii) made all payments as required by their oral trial period agreement and complied with Citis requests for documentation, (iii) but were improperly but were charged for various fees, including foreclosure fees and costs (the "Fee Class").
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171.
Excluded from the Class are governmental entities, Citi, its affiliates and
subsidiaries, Citi s current employees and current or former officers, directors, agents, representatives, and their family members. 172. certification. 173. Plaintiff does not know the exact size or identities of the proposed Class, Plaintiff reserves the right to re-define the Class prior to moving for class
since such information is in the exclusive control of Citi. Plaintiff, however, believes that the Class encompasses thousands of individuals who are geographically dispersed throughout the United States, including within the State of Iowa. Therefore, the number of persons who are members of the Class described above are so numerous that joinder of all members in one action is impracticable. 174. All members of the Class have been subject to and affected by a uniform
course of conduct by Citi that was designed to evade the requirements of HAMP and avoid permanent loan modifications in an effort to increase Citi s income through, inter alia, maintaining high service fees on larger principal balances, collecting additional late fees and process management fees and avoiding increased fixed overhead costs. 175. This course of conduct also includes: stringing out, delaying or otherwise
hindering the modification process in violation of HAMP rules by: (1) instituting or pursuing foreclosure actions while borrowers are in the trial period or instituting foreclosure actions before the start of the trial period, (2) charging borrowers late fees and penalties during their trial periods, (3) reporting borrowers to credit agencies for delinquency while they are on the trial period,
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(4) repeatedly requesting that borrowers send the required documentation over and over again, (5) failing to allocate adequate resources such as sufficient trained staff to facilitate the modification process, (6) failing to establish proper communication between internal corporate departments necessary to facilitate borrowers modification requests, (7) failing to timely notify borrowers at the end of the three month trial period that they have been provided or have been denied a permanent HAMP modification, and (8) denying permanent HAMP modifications for reasons that are false, untrue and/or entirely inaccurate. 176. The claims are based on standardized written form contracts (the TPP
Agreements) and the uniform HAMP rules contained in the Servicer Handbook which govern the entirety of the Making Home Affordable Program and all aspects of loan modification under HAMP. 177. Questions of law and fact that are common to the entire Class predominate
over individual questions because the actions of Citi complained of herein were generally applicable to the entire Class. These legal and factual questions include, but are not limited to: a. The nature, scope and operations of Citis wrongful practices; b. Whether there is widespread fraud in the foreclosure process; Whether Citi should be required under the doctrine of promissory estoppel to offer permanent modification to Class Members; d. Whether Citi breached their contracts, actual or implied, with Class Members;
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e. Whether Citi breached the mortgage loan agreements by improperly seeking fees, charges, and otherwise foreclosing on Plaintiff and Class Members houses, where class members had received and/or complied with the TPP Agreement terms and/or other proprietary loan modification agreements; f. Whether Citis receipt of an executed TPP Agreement, along with supporting documentation and three monthly payments, creates a binding contract or otherwise legally obligates Defendant to offer class members a permanent HAMP modification; g. Whether Citis failure to provide permanent HAMP modifications in the circumstances described herein where the borrower has timely made the requisite 3 monthly payments pursuant to the TPP Agreement and supplied the necessary documentation amounts to a breach of contract and/or a breach of the covenant of good faith and fair dealing; h. Whether mortgage servicers have defaulted on their servicing contracts by charging predatory fees to borrowers that are ultimately paid by investors; i. Whether securitization chain of title, namely whether the transfer of mortgages in the securitization process was defective, rendering mortgagebacked securities into non-mortgage backed securities; j. Whether Citi negligently processed loan modification applications, foreclosures, and settlements;
k. Whether Citi made false statements of material fact or concealed material facts, and whether Plaintiff and the Class members reasonably relied on such misrepresentations to their detriment; 1. Whether Citi s conduct amounts to a violation of the Fair Debt Collection Practices Act; m. Whether Citi was unjustly enriched at the expense of Plaintiff and the proposed Class Members; n. Whether Citis conduct violates Iowas Consumer Fraud and Deceptive Business Practices Act and corresponding regulations; and o. Whether the Court can order damages and enter injunctive relief. 178. Plaintiffs claims are typical of the members of the Class because Plaintiff and all Class Members were injured by the same wrongful practices of Citi as described 50
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in this Complaint. Plaintiffs claims arise from the same practices and course of conduct that gives rise to the claims of the Class Members, and are based on the same legal theories. Plaintiff has no interests that are contrary to or in conflict with those of the Class they seek to represent. 179. Questions of law or fact common to the members of the Class predominate
and a class action is superior to other available methods for the fair and efficient adjudication of this lawsuit, because individual litigation of the claims of all Class Members is economically unfeasible and procedurally impracticable. While the aggregate damages sustained by Class Members are likely to be in the millions of dollars, the individual damages incurred by each Class Member resulting from Citis wrongful conduct are, as a general matter, too small to warrant the expense of individual suits. The likelihood of individual Class Members prosecuting separate claims is remote and, even if every Class Member could afford individual litigation, the court system would be unduly burdened by individual litigation of such cases. Individualized litigation would also present the potential for varying, inconsistent, or contradictory judgments and would magnify the delay and expense to all parties and to the court system resulting from multiple trials of the same factual issues. Plaintiff knows of no difficulty to be encountered in the management of this action that would preclude its maintenance as a class action and certification of the Class under Rule 23(b)(3) is proper. 180. Relief concerning Plaintiffs rights under the laws herein alleged and with
respect to the Class would be proper. Citi has acted or refused to act on grounds generally applicable to the Class, thereby making appropriate final injunctive relief or corresponding declaratory relief with regard to Class Members as a whole and certification of the Class under Rule 23(b)(2) is proper. 51
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FIRST COUNT (Breach of Oral Modification Agreement) 181. Plaintiff and Class Members incorporate by reference the allegations
contained in the preceding paragraphs as though fully set forth herein. 182. Plaintiff and Class Members sought permanent loan modifications through
Citis advertised loan modification programs, as described above. Plaintiff timely provided all the necessary documentation requested by Citi in a timely manner in order to participate in the HAMP modification program. 183. Citis offered Plaintiff and Class Members a permanent loan modification
under HAMP in return for making timely trial period payments and complying with Citis documentation requests. 184. The plain terms of the oral offer specified that a permanent loan
modification automatically will follow the successful completion of the trial period. Moreover, the essential terms of the promised permanent loan modification are not open to negotiation or discretionary alteration by either Citi or the Plaintiff and Class Members. 185. Citis oral offer of trial period payments with the promise that they would
be made permanent if Plaintiff made the trial payments, constituted an offer to Plaintiff. 186. Plaintiff accepted this offer when he made modified payments during the
trial period and relied upon it to his detriment. 187. The offer of Citi, and the acceptance thereof by Plaintiff and Class
Members, formed an enforceable contract supported by valid consideration between the parties.
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In the alternative, Citi s sending oral agreement was an invitation to
modify the mortgage permanently. Plaintiff and Class Members act of making first timely modified payment to Citi constituted an offer. Citi accepted this offer by verifying their eligibility, determining that they were qualified for the HAMP modification and accepting and negotiating the initial payment received. 189. The oral agreement is supported by consideration on account of mutual
exchange of promises. Plaintiff and Class Members promised to keep their information current and to make the temporary payments on time. In exchange Citi promised to send Plaintiff and Class Members a permanent loan modification agreement for their signature in exchange for the completion of the trial period. 190. In addition or in the alternative, the oral agreement is supported by further
consideration in the form of each party foregoing legal obligations or rights. Plaintiff and Class Members forewent alternative avenues they could have pursued including, by way of example, refinancing, short sales, bankruptcy or listing the property. Citi agreed to forego foreclosure proceedings and late fees. Both sides benefitted from the exchange in that the Plaintiff and Class Members were presented with an opportunity to keep their homes and Citi enjoyed the ability to keep customers, receive incentive payments from the government for performing the modification, and avoid or mitigate the costs and risks associated with foreclosure. 191. In the alternative, and as explained in Fourth Count as incorporated fully
herein, Plaintiff and Class Members justifiable reliance serves as a substitute for any lack of consideration. 192. Plaintiff and Class Members therefore formed valid contracts with Citi.
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By not providing a permanent modification after Plaintiff upheld his end
of the bargain, Citi breached the oral agreement. 194. contract. 195. By failing to offer permanent HAMP modification, Citi breached those Plaintiff remains ready, willing, and able to honor his duties under the oral
contracts and any further obligation by Plaintiff and Class Members under this contract was excused. 196. Citi s breach of the oral contract has resulted in reliance and expectation
damages, along with compensable incidental or other contractual damages, all of which were the ordinary and natural, foreseeable consequences of Citi s breach. 197. As an actual and proximate result of Citis breaches described herein,
Plaintiff and Class Members have further been damaged in the form of lost time and opportunity costs. By entering into an oral agreement and making payments during and after the trial period, Plaintiff and Class Members spent monies on a plan that could have gone towards other potential remedies that they might have otherwise pursued to save their home. 198. In addition to the lost opportunity cost of pursuing other means of dealing
with their defaults, Plaintiff and Class Members permanent modification terms and other options may be adversely affected and additional fees and charges may be applied. 199. Instead of providing timely permanent modification agreements, Citi has
demanded balloon payments, late and default fees. In addition, Citi has imposed on the Plaintiff and Class Members improper fees and costs by during and after their trial period by treating the trial payments as foreclosure triggering defaults.
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Plaintiff and Class Members have suffered additional harm in the form of
foreclosure and collection activities against their home. Plaintiff and Class Members have suffered additional harm and expense in the form of defending foreclosures of their homes when, in reality, they should have been extended permanent modification agreement of their mortgage loans and should have been several months into their modified permanent payment plans. In addition, Plaintiff and Class Members have suffered the additional harm of adverse credit reporting. 201. As a direct and proximate result of Citi s breach of the loan modification
agreements, Plaintiff and Class Members did not receive the benefit of the bargain, were damaged, and are threatened with additional harm, in an amount to be determined at trial. 202. Plaintiff and Class Members were damaged, and are threatened with
additional harm, including, being charged late fees, excessive interest on principal amounts for which Citi refused to apply payments in a timely manner, adding substantially to mortgagors overall debt. Plaintiffs and Class Members have also suffered emotional distress, wrongfully being placed in imminent danger of losing their homes, impairment in their ability to sell their property, and attorneys fees in defending fraudulent foreclosures. Moreover, Plaintiff and Class Members have suffered damages, including, but not limited to, uncertainty of clear title, which causes a smaller pool of potential buyers, lowers home values, real estate owned sales resulting in higher deficiency judgment, and decreased time to negotiate a modification or workout of the loan.
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SECOND COUNT (Breach of the Original Mortgage Agreement) 203. Plaintiff and Class Members incorporate by reference the allegations
contained in the preceding paragraphs as though fully set forth herein. 204. Citi waived the terms of the mortgage loan by asking Plaintiff and Class
Members not to make any payments as required by the mortgage loan agreement when it asked Plaintiff and Class Members to make new modified payments under the oral modification agreement with a promise that doing so will result in a permanent modification agreement. 205. Plaintiff and Class Members complied with the modified payment terms
and were making timely payments and ready and willing to make timely modified mortgage payments and Citi had waived the terms and conditions of the original mortgage. Plaintiff and Class Members also complied with all conditions, covenants, and promises required of them under the original mortgage agreement and as modified by the oral agreement. 206. Despite the promise to modify the original mortgage and waiver of the
benefit terms, Citi charged Plaintiff and Class Members various fees, including, but not limited to, telephone payment fees, late charges, inspection fees, appraisal fees, servicing fee, and other foreclosure related fees and costs, and thereafter proceeded to file a foreclosure action which Plaintiff and Class Members had to defend at their own costs. 207. Citi could not have penalized Plaintiff and Class Members for their
compliance with Citis terms of making modified mortgage payments, by treating them as delinquent and by demanding exorbitant balloon payments, charging them late and
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delinquency fees, and other related fees and charges, and declaring them as delinquent to the credit rating agencies. 208. After making a balloon payment of the arrears, as well as the illegal fees
and charges, Plaintiff and Class Members made timely monthly mortgage payments and complied with all conditions, covenants, and promises required of them under the mortgage. 209. Under the mortgage, delinquency fees, late fees and other related fees and
charges can only be made if mortgage payments are not made in a timely manner. 210. Despite receiving all the payments on the mortgage and the note, Citi
continues to show Plaintiff and Class Members in default by failing to apply their payments to their accounts, and allegedly keeping the payments in suspension accounts. 211. Citi breached the mortgage and note by demanding arrears in the escrow
account, late fees, delinquency fees etc. 212. Upon information and belief, the fees and charges are computer generated
requests that do not provide any meaningful information to Citi. 213. Also, upon information and belief, Citis computer system automatically
generates and charges delinquency fees, late fees, and related fees if payments are not reflected as having been received against the account, which it did because Citi posted all the payments received under the modified oral agreement in a separate suspension account. 214. Upon information and belief, Citi deducts the illegal charges and fees from
the escrow accounts.
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As a proximate result of Citis breach of original mortgage, Plaintiff and
Class Members have suffered damages on account of the unlawful fees and charges, and having to defend an unlawful foreclosure action in an amount to be proven at trial. 216. Plaintiff and Class Members were damaged, and are threatened with
additional harm, including, being charged late fees, excessive interest on principal amounts for which Citi refused to apply payments in a timely manner, adding substantially to mortgagors overall debt. Plaintiffs and Class Members have also suffered emotional distress, wrongfully being placed in imminent danger of losing their homes, impairment in their ability to sell their property, and attorneys fees in defending fraudulent foreclosures. Moreover, Plaintiff and Class Members have suffered damages, including, but not limited to, uncertainty of clear title, which causes a smaller pool of potential buyers, lowers home values, real estate owned sales resulting in higher deficiency judgment, and decreased time to negotiate a modification or workout of the loan. THIRD COUNT (Breach of Covenant of Good Faith and Fair Dealing) 217. Plaintiff and Class Members incorporate by reference the allegations
contained in the preceding paragraphs as though fully set forth herein. 218. Every contract imposes upon each party a duty of good faith and fair
dealing in its performance, which requires that neither party do anything to infringe upon the other partys rights to the benefits of the agreement, or to deprive the other party of the contracts benefits. 219. Citi has a duty of good faith and fair dealing with respect to its dealings
with borrowers, including Plaintiff and the Class Members. Citi had an implied duty to
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insure that its loan modification and foreclosure procedures were not fraudulent or unconscionable with respect to borrowers. 220. Citi breached the implied covenant of good faith and fair dealing
contained its oral agreement and the original mortgage agreement which Citi services, as alleged above. 221. Citi breached the implied covenant by, amongst other things, (a) failing to
fulfill its contractual obligations, written or implied promises, and loan servicing functions; (b) failing to apply the properly made monthly mortgage payments under the mortgage and note towards the mortgage accounts of Plaintiff and Class Members and instead showing them as delinquent and issuing demand letter, while charging various fees, including but not limited to, delinquency fees, late fees, escrow amounts that have already been paid, and interest amounts that have already been paid in a timely manner; (c) initiating unlawful foreclosure proceedings without cause; (d) failing to make good faith efforts to provide the loan servicing functions owed to Plaintiff and the Class in connection with their review and retention of documentation, including loan modification applications; (e) failing to make good faith efforts to provide Plaintiff and Class Members with a permanent loan modification; (1) failing to disclose that Plaintiff modified reduced payments would be reported to credit bureaus as delinquent; and (g) demanding exorbitant balloon payments, late fees, delinquency fees from Plaintiff and Class Members instead of providing the modification of the mortgage; and (i) billing borrowers for unreasonable and unnecessary and unlawful fees, including, but not limited to, inspection fees, delinquency fees, late fees etc.
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222.
In so doing, Citi acted recklessly, maliciously, in bad faith, and without
good cause, thereby preventing Plaintiff and the Class from receiving their reasonably expected benefits under their contracts. 223. As a direct and proximate result Citis breaches of implied covenant of
good faith and fair dealing, Plaintiff and the Class Members were damaged. Plaintiff and Class Members were damaged, and are threatened with additional harm, including, being charged late fees, excessive interest on principal amounts for which Citi refused to apply payments in a timely manner, adding substantially to mortgagors overall debt. Plaintiffs and Class Members have also suffered emotional distress, wrongfully being placed in imminent danger of losing their homes, impairment in their ability to sell their property, and attorneys fees in defending fraudulent foreclosures. Moreover, Plaintiff and Class Members have suffered damages, including, but not limited to, uncertainty of clear title, which causes a smaller pool of potential buyers, lowers home values, real estate owned sales resulting in higher deficiency judgment, and decreased time to negotiate a modification or workout of the loan. FOURTH COUNT (Promissory Estoppel) 224. Plaintiff and Class Members incorporate by reference the allegations
contained in the preceding paragraphs as though fully set forth herein. 225. Citi entered into an oral agreement described above with Plaintiff and the
Class that obligated Citi to provide Plaintiff and other members of the Class a permanent loan modification under HAMP if all trial period plan payments as set forth in the TPP Contract were timely made and required documentation was submitted.
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In the alternative, under the theory of promissory estoppel, Citi is estopped
from denying the existence of an oral agreement between itself and Plaintiff and with other Class Members and because Citi s oral agreement was intended to and did induce Plaintiff and the Class to rely, Plaintiffs and the Class Members reliance on the oral agreement was reasonable and justified, and that reliance was to the detriment of Plaintiff and the Class Members. 227. Plaintiffs and the Class Members reliance was to their detriment. By
complying with Citis promise of permanent modification, Plaintiff and Class Members forewent other remedies to address their financial situation, such as refinancing of their mortgage, or listing it in the market for sale. In light of the declining real estate market, failure to market and sell the property at that time has reduced the amount Plaintiff can recover from such a sale. 228. Instead Citi has demanded large balloon payments and in order to
capitalized the difference between the original and modified mortgage payments to increase principal balances and the related interest payments, Citi deliberately has not applied either the balloon payments or the regular mortgage payments towards their mortgage account. Indeed, Citi has also reported Plaintiff and similarly situate Class Members as delinquent, thereby damaging their credit. Plaintiff and Class also suffered additional harm in the form of improper fees and costs collected from their accounts. 229. As a direct result of Citis actions, Plaintiff and the Class Members have
suffered damages by Citis actions and representations in an amount to be proven at trial. Plaintiff and Class Members have also suffered detriment in the form of foreclosure expenses and collection activity against their home, delinquency fees, and other foreclosure related fees, and diminished credit ratings. Plaintiff and Class Members have 61
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been living in a state of stressful anxiety because Citis conduct and in light of the ongoing risk of foreclosure sale. FIFTH COUNT (Negligence) 230. Plaintiff and Class Members incorporate by reference the allegations
contained in the preceding paragraphs as though fully set forth herein. 231. Citi owed Plaintiff and Class Members a duty of reasonable care in the
processing and maintenance of their mortgage accounts. 232. That duty required Citi to (a) act prudently in processing the mortgage
payments made by Plaintiff and Class Members; (b) act prudently in applying the mortgage payments towards Plaintiff and Class Members mortgage accounts in a timely manner; (c) act prudently in ensuring that no extra or illegal fees and charges are being collected from Plaintiff and Class Members accounts; (b) act prudently in applying the escrow accounts. 233. Citi has also been engaged in the process of giving advice and information
to Plaintiff and Class Members during the loan modification process. 234. Citi owed Plaintiff and Class Members a duty of reasonable care in the
processing and determination of their loan modification applications and the processing of their foreclosures. 235. The duty required Citi to (a) act prudently in considering Plaintiff and
Class Members documents and loan modification accounts, (b) act prudently in considering loan modification options for Plaintiff and Class Members, (c) act prudently in informing Plaintiff and Class Members of the ramifications of the ultimate modification denial and keep the promises to Plaintiff and Class Members concerning
M IJ
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loan modifications. The duty arose out of the circumstances surrounding the parties, because harm to the Plaintiff and Class Members was foreseeable, the burden for Citi to have used reasonable minimum care was minimal, and the relationship between the parties was close in that they shared contractual privity. 236. Citi breached its tort duties in the following ways: (a) By failing to properly apply the payments made by Plaintiff to their accounts during the trial period; (b) By threatening foreclosure despite the fact that Plaintiff and Class Members upheld their part of the bargain; (c) By improperly charging and collecting illegal fees and costs that were neither applicable nor could have been collected by Citi by failing to properly apply the monthly mortgage payments made by Plaintiff and Class Members; (d) By providing misleading information regarding the status of Plaintiffs modification requests; (e) By systematically ignoring Plaintiff and Class Members written and verbal inquiries regarding the status of their modification requests; (f) By failing to instruct Plaintiff and Class Members to save the difference between the original and reduced mortgage payments or "savings" under the oral agreement; (g) By failing to inform Plaintiff and Class Members that the savings would be deemed a default if a permanent modification was not ultimately offered;
ON
Case 4:11-cv-00443-RP -CFB Document 1 (h)
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By failing to provide complete and accurate information regarding the impact of modified payments during the modification process on Plaintiff and Class Members credits;
(i)
By threatening foreclosure despite the fact that equity compels the legal fiction of no default as estoppel against foreclosure and various statues and guidelines state that no foreclosure actions be initiated during the modification process;
(j)
By failing to properly evaluate Plaintiff and Class Members loan modification applications and demanding piecemeal and duplicative documentation;
(k)
By otherwise failing to abide by the requirements of due care, industry standards, or other common practice in reviewing Plaintiff and Class Members modification paperwork, deciding whether to offer or provide a modification, informing Plaintiff and Class Members of the details of such modification, and subsequently denying permanent modification.
237. As a direct and proximate result of the aforementioned wrongful conduct committed by Citi, Plaintiff and the Class Members have suffered and will continue to suffer damages and economic loss, including but not limited to payment of increased interest, longer loan payoff times, higher principal balances, deterrence from seeking other remedies to address their financial concerns of making mortgage payments, damage to their credit, additional income tax liability, costs and expenses incurred to prevent or fight foreclosure, and other damages. Plaintiff and Class Members are entitled to damages and injunctive and declaratory relief as claimed below.
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SIXTH COUNT (Negligent / Fraudulent Misrepresentation) (Regarding Fees and Charges) 238. Plaintiff and Class Members incorporate by reference the allegations
contained in the preceding paragraphs as though fully set forth herein. 239. As alleged herein, Citi intentionally, willfully, knowingly and recklessly
charged and collected fees for services that the mortgage loan contracts unambiguously stated would not be charged. 240. During the Class Period Citi made, and continues to engage in fraudulent,
misrepresentative, false and/or deceptive practices in order to charge extraneous fees and collaterally profit. More particularly, the monthly mortgage statement Citi sent to Plaintiff and Class members contain representations regarding amounts due on their loans. By issuing these mortgage statements, Citi represented to the Plaintiff and Class members that all amounts due on these statements were lawful and appropriate charges. Therefore, Citi misrepresented to Plaintiff and Class members in their monthly mortgage statements that all amounts due as reflected in these statement, including the property inspection fees, late fees, delinquency fees, were lawful and proper. Citi also concealed improper inspection fees and other foreclosure related fees as "other charges" on its mortgage statements. 241. Plaintiff and Class Members have relied upon the various statements and
representations of material fact and paid and/or have significantly greater balance loan payments that include these charges and upon which they are making monthly payments. Those statements, representations, and omissions were made for the purpose of inducing reliance thereon by Plaintiff and Class Members to pay fees not due to the Citi. Citi
65
Filed 09/23/11 Page 66 of 82
knowing misrepresentations, misleading statements, and omissions of material fact by Citi included, but were not limited to, those alleged in the Complaint. 242. Plaintiff and Class Members had a right to rely on, and did reasonably rely
on, Citis statements and misrepresentations. Citis misrepresentations and omissions were material, in that Plaintiff and Class Members would not have paid and/or would have disputed the improper amounts if they had known that the statements and representations of Citi were false, misleading, incomplete, unfair or untrue. 243. Each of the above misrepresentations, misleading statements, and
omissions made by Citi were false, misleading, incomplete, and untrue, and were known or should have been known by Citi to be false, misleading, incomplete, and untrue when made. Each misrepresentation, misleading statements, and omissions was made with the requisite intent to deceive and defraud, or to conceal the truth about Citis deceptive and fraudulent practices or with disregard for its truth or completeness, or in spite of the fact that it was untrue. Each misrepresentation, misleading statements, and omissions was made to induce Plaintiff and Class Members to pay fees and charges not due to Citi. 244. Plaintiff and Class Members had no knowledge of the falsity,
incompleteness, or untruth of the statements and representations of Citi when they paid and/or allowed Citi to capitalize these fees and charges. 245. By reason of Citi s misrepresentations, misleading statements, and
omissions, Plaintiff and Class Members suffered financial injuries. 246. The conduct of the Citi in perpetrating the fraud described above was
malicious, willful, wanton, and oppressive, or in reckless disregard of the rights of Plaintiff and other Class Members, thereby warranting the imposition of punitive damages against Citi.
Filed 09/23/11 Page 67 of 82
Plaintiff and Class Members were damaged, and are threatened with
additional harm, including, being charged late fees, excessive interest on principal amounts for which Citi refused to apply payments in a timely manner, adding substantially to mortgagors overall debt. Plaintiffs and Class Members have also suffered emotional distress, wrongfully being placed in imminent danger of losing their homes, impairment in their ability to sell their property, and attorneys fees in defending fraudulent foreclosures. Moreover, Plaintiff and Class Members have suffered damages, including, but not limited to, uncertainty of clear title, which causes a smaller pool of potential buyers, lowers home values, real estate owned sales resulting in higher deficiency judgment, and decreased time to negotiate a modification or workout of the loan. SEVENTH COUNT (Unjust Enrichment/Restitution In the Alternative) 248. Plaintiff and Class Members incorporate by reference the allegations
contained in the preceding paragraphs as though fully set forth herein. 249. Citi was not entitled to receive late fees, delinquency fees and other
related fees and charges from homeowners who were making timely monthly mortgage payments under the original mortgage. 250. As alleged herein, Citi has unjustly benefited from their unlawful and
inequitable acts resulting in the payment of money by Plaintiff and the Class Members. 251. Citi has derived monies, profits and revenues resulting from their false,
misleading, deceptive, unfair and inequitable conduct. It would be inequitable for Citi to be permitted to retain any of the proceeds derived as a result of their unlawful conduct.
67
Filed 09/23/11 Page 68 of 82
252.
Citi should also be enjoined from continuing to engage in any unlawful or
inequitable act alleged in this Complaint. 253. Citi owed Plaintiff and Class Members a duty of reasonable care in the
processing and determination of their mortgage accounts and processing of foreclosures that are generally initiated by the issuance of demand letters. 254. Citi breached this duty by failing to properly account for Plaintiff and
Class Members mortgage payments. 255. As a direct and proximate result of the aforementioned wrongful conduct
committed by Defendant, Plaintiff and the Class Members have suffered and will continue to suffer damages and economic loss in an amount to be proven at trial. Plaintiff and Class Members are entitled to damages and injunctive and declaratory relief as claimed below. EIGHTH COUNT (Violation of the Fair Debt Collection Practices Act (FDCPA. 15 U.S.C. 41692 et seq.) 256. Plaintiff incorporate by reference the allegations contained in the
preceding paragraphs as though fully set forth herein. 257. Plaintiff and Class Members are consumers, and Citi is a debt collector, as
those terms are used in the federal Fair Debt Collection Practices Act ("FDPCA"), 15 U.S.C. 1692(a). 258. Citi is a debt collector under 15 U.S.C. 1692(a)(6). Citis principal
business is debt collection. In its demand letters, Citi specifically states that the letter is an attempt to collect a debt or that Citi is debt collector. 259. As set forth in greater detail above, Citi through its employees and/or
agents, engaged in a pattern and practice of filing false, deceptive, misleading, and
Filed 09/23/11 Page 69 of 82
perjured affidavits in connection with foreclosure proceedings in violation of 15 U.S.C. 1 692(e)(l 0), which prohibits the "use of any false representation or deceptive means to collect or attempt to collect any debt..." and/or 15 U.S.C. 1692(f), which prohibits the use of any "unfair or unconscionable means to collect or attempt to collect any debt" and 15 U.S.C. 1692(e)(2)(A) & 8. 260. Citi used false, deceptive, or misleading representations or means in
connection with the collection of the mortgage when it engaged in oral and written communications with Plaintiff and Class Members and made one or more of the misrepresentations outlines in fraudulent and negligent Misrepresentation counts of this complaint. 261. Pursuant to 15 U.S.C. 1692k, Plaintiff and the Class Members are entitled
to actual damages including damages for emotional distress, statutory damages as set forth therein, and reasonable attorneys fees and costs. 262. Because the conduct of Citi was frequent and persistent, because the
nature of the violations of the FDCPA were so egregious, because the FDCPA violations were part of a deliberate scheme, Plaintiff and the Class are entitled to the maximum possible relief permitted under 15 U.S.C. 1692k(a). NINTH COUNT (Fair Credit Reporting Act) Plaintiff incorporate by reference the allegations contained in the
263.
preceding paragraphs as though fully set forth herein. 264. Plaintiff and Class Members were instructed by Citi to not make any
payments under their original mortgage terms, while they were making payments under the oral modified agreement.
Wt
Filed 09/23/11 Page 70 of 82
Plaintiff and Class Members were told that the modified payments will not
affect their credit. 266. Citi also failed to properly apply the monthly mortgage amounts against
Plaintiff and Class Members accounts and deliberately and intentionally kept the payments in a suspension account without noticing receipt of the payments in Plaintiff and Class Members mortgage account summary. 267. Thereafter, Citi reported Plaintiff and Class Members as delinquent to
credit reporting agencies without indicating that their payments were timely or on a modified payment plan made in lieu of the original payments on Citis instructions. 268. In so doing, Citi furnished information it knew or should have known was
incomplete or inaccurate to credit reporting agencies in violation of Fair credit Reporting Act, 15 U.S.C. 1681s-2(a)(1)(A), which imposes a duty upon furnishers of credit information to report accurate information to consumer reporting agencies regarding a consumers credit. 269. Citis action in publishing and providing false information concerning
Plaintiff and Class Members as set out above were not in compliance with the provisions of 15 U.S.C. 1681e(b), which requires Citi to adopt reasonable procedures to ensure maximum possible accuracy of credit information. 270. A consumer may recover damages for a willful violation of 15 U.S.C.
1681 s-2(b)(1 )(A)-(D). 271. Upon information and belief, Plaintiff and Class Members allege that
Citis representatives failed to report Plaintiffs credit history and payment history accurately due to lack of training, thereby failing to follow reasonable procedures as required by law. 70
Filed 09/23/11 Page 71 of 82
Citi had a duty under 15 U.S.C. 1681e(b) in that they did not adopt
reasonable procedures assuming maximum possible accuracy of the information they report, and in failing to exercise reasonable care in the preparation of credit information and credit reports. As such Citis conduct was in non-compliance with 15 U.S.C. 1681o. 273. Citis actions complained of above was reckless, willful, malicious, and
wanton and justify an award of punitive damages. 274. As a direct and proximate result of Citis actions, Plaintiff and Class
Members have both suffered actual and compensatory damages. 275. Plaintiff and Class Members credit rating has been materially impacted
by Citis improper and negligent reporting. Plaintiff and Class Members who were instructed not to make the payments under their original mortgage loans, have suffered actual injury, including, but not limited to, damage to their credit scores, a loss of available credit, and increased cost of credit. Plaintiff, individually and on behalf of the members of the proposed class, seek all available damages under the FCRA, including punitive damages, together with attorneys fees and costs. TENTH COUNT (Iowa Statutory Claims) 276. Plaintiff and Class Members incorporate by reference the allegations
contained in the preceding paragraphs as though fully set forth herein. 277. Citi is a debt collector within the meaning of Iowa Code 537.7102 and
was engaged in the collection of debt as defined in Iowa Code 537.7102. 278. Citis representation of the existence and amount of delinquent debt,
which debt neither existed nor was delinquent, constitutes a false accusation made by a
71
Filed 09/23/11 Page 72 of 82
person, that Plaintiff and Class Members were willfully refusing to pay a just debt in violation of Iowa Code 537.7103(l)(c). 279. Citi s representation to credit reporting agencies and to Plaintiff and Class
Members constitutes an intentional misrepresentation or a representation which tended to create a false impression of the character, extent or amount of a debt, which debt did not, in fact, exist in violation of Iowa Code 537.7103(4)(e). 280. Citis aforesaid violation of the Iowa Consumer Credit Code is a
proximate cause of Plaintiff and Class Members actual damages. 281. Plaintiff and Class Members actual damages include diminution of credit
reputation, the loss of actual credit opportunities, consequential damages arising out of the loss of the credit opportunities, personal emotional pain and suffering including anxiety, sleeplessness, and other indicia of mental suffering. 282. Citis actions were intentional and were done in knowing derogation of a
statutory duty to the contrary so that Plaintiff and Class Members are entitled to the maximum civil penalty of $1,000 per violation provided in Iowa Code 537.520 1 and attorney fees fee based on the nature and amount of services pursuant to Iowa Code 537.5201. 283. Therefore, Plaintiff and Class Members are also entitled to actual damages
for the maximum civil penalty provided by law and for reasonable attorney fees, together with interest at the highest rate allowed by law and for the costs of the action.
ELEVENTH COUNT (Fraud/Intentional Misrepresentation)
284.
Plaintiff and Class Members incorporate by reference the allegations
contained in the preceding paragraphs as though fully set forth herein.
72
Filed 09/23/11 Page 73 of 82
285. Citi knowingly and recklessly misrepresented and/or failed to disclose material facts relating to Citi s loan modification and foreclosure processes, as well as regarding the maintenance of the escrow accounts. Citi made false representations of material facts to Plaintiff and Class Members in the following ways: (a) Citi falsely advertized that it will help Plaintiff and Class Members stay in their homes by providing them modified sustainable mortgage payments under HAMP which will be made permanent at the end of the trial period. (b) Citi misrepresented in the oral and written communication that if Plaintiff and Class Members would receive a permanent modification agreement if they upheld their part of the bargain by making three trial period payments and submitting documentation. (c) By telling Plaintiff and Class Members that Citi will investigate and provide permanent modification agreements, Citi misrepresented, expressly or by implication, its present intent to act in good faith in providing a permanent modification agreement. (d) By not communicating in clear or reasonably understandable manner that the difference between the modified and original payments or "savings" were not savings and would be treated as defaults, Citi concealed this information. (e) By asking Plaintiff and Class Members to make modified trial payments in lieu of the original mortgage payments and telling Plaintiff and Class Members that making of the modified payments will not impact their mortgage accounts or their credit scores, Citi concealed the fact that the modified trial payments were defaults. 73
Filed 09/23/11 Page 74 of 82
(f)
Citi misrepresented by telling Plaintiff and Class Members that it will not charge any late fees, delinquency fees or other fees/charges, while Plaintiff and Class Members were making modified trial payments.
(g)
Citi misrepresented by telling Plaintiff and Class Members that it will not foreclose their homes while they were making modified trial payments or were awaiting permanent modification of the mortgages.
(h)
Citi misrepresented to Plaintiff and Class Members that it would maintain proper accounts and will not charge any late fees delinquency charges while they were making their monthly mortgage payments in a timely manner.
(i)
Generally, in its written and oral communications with Plaintiff and Class Members, the dates and times of which can be ascertained from Citis records of which it is in exclusive possession, Citi misrepresented explicitly or implicitly that Plaintiff and Class Members were prequalified and eligible for a permanent modification of their mortgage, the trial payments were not defaults, Plaintiff and Class Members homes were not in jeopardy, and Citi was acting in good faith to help Plaintiff and Class Members.
286.
Citi knew of the falsity of its representations, or made them with such
reckless indifference to the truth, that it would be reasonable to charge Citi with knowledge of its falsity. The factual basis for this allegation are as follows: (a) Citi was motivated by greed, and was willfully blind to Plaintiff and Class Members circumstances, for the reasons and in the manner outlines in paragraphs 22 to 39 of this Complaint. 74
Case 4:11-cv-00443-RP -CFB Document 1 (b)
Filed 09/23/11 Page 75 of 82
Citi concealed that the differences between the modified payments and original payments, or "savings" under the TPP Agreement are actually foreclosure-triggering defaults, and given Citi s motive and actual malice it is reasonable to conclude that Citi knew its representation to be false.
(c)
Citi concealed that it treats the modified payments as defaults, triggering default fees, delinquency fees, late charges, inspection fees, appraisal fees, inspection fees, appraisal fees, and other foreclosure related fees and costs from all homeowners who have applied for HAMP modification and are in the process of making trial payments.
(d)
Citi concealed that it reports Plaintiff and Class Members as delinquent to the credit agencies, even when they are making the modified mortgage payments. Lower credit rates result in higher interest rates, Citi was motivated by the foregoing.
(e)
Citi concealed that it deliberately delays the process of providing permanent modification agreements by repeatedly asking for the same documents, in order to increase of the outstanding amounts due and payable, which are then capitalized into the principal loan balance, resulting in higher interest rates and substantially higher servicing fees for Citi. Given Citi s motive and actual malice it is reasonable to conclude that Citi knew its representation to be false.
(0
Citi also concealed that it regularly denies permanent modification of the mortgages and instead demand balloon payments of all "savings" to make the mortgage current, and failure to meet this demand will result in
75
Filed 09/23/11 Page 76 of 82
foreclosure. Given Citis motive and actual malice it is reasonable to conclude that Citi knew its representation to be false. (g) Citi also concealed that it charges late fees, delinquency fees and other charges by mismanaging Plaintiff and Class Members mortgage and escrow accounts. 287. The misrepresentations, omissions and concealments complained of herein
were material and were made on a uniform basis. 288. Citi intended that Plaintiff would act in reliance on the misrepresentations.
The factual basis for this allegation is simple - why else would Citi make knowingly false misrepresentations to Plaintiff as alleged in 311 above, and engage in other conduct alleged in paragraphs 158 to 238 of this Complaint. 289. Moreover, as detailed in paragraphs 22 through 39 of the Complaint, Citi
has a clear motive to do so. Citi, as mortgage servicer, profits from higher principal loan balances because the ratio of its servicing fees is directly proportionate to the outstanding principal balance of the mortgages it services. In addition, Citi makes money on the float and gets to keep all late fees and charges. A foreclosure produces late fees and charges as well as foreclosure related fees and expenses, which are instantly paid to a servicer at a foreclosure sale. Therefore, Citi is incentivized to maximize the foreclosure fees and expenses, and profits from keeping Plaintiff and Class Members in default. Citi was motivated by the foregoing. 290. Plaintiff and the Class were unaware of that these material facts were
incorrect and could not reasonably discover the undisclosed facts independently. 291. Plaintiff and Class Members, as average consumers, did justifiably rely on
the misrepresentations by Citi. Plaintiff and Class Members relied to their detriment by 76
Filed 09/23/11 Page 77 of 82
(a) completing and returning the HAMP application and financial documentation numerous times, (b) agreeing to honor and ultimately honoring their HAMP obligations, (c) not refinancing to a different lender, (d) trusting Citi by not continuing to simply find ways to pay their regular mortgages, (e) incurring, on paper, defaults giving rise to foreclosure status, (f) incurring, on paper, loan delinquencies prompting Citi to contact credit agencies and ruin Plaintiff credit scores, and (f) other acts of detrimental reliance. One may infer that reliance was justified or reasonable because Plaintiff and Class Members are consumers and the inferior party in the transaction, as Citi was the superior huge corporate party experienced in servicing mortgages. 292. Had Plaintiff and the Class Members been aware of the true nature of
Citi s business practices, they would have pursued other options. Such reliance may also be imputed, based upon the materiality of Citis wrongful conduct. 293. Citis acts and misconduct, as alleged herein, constitute oppression, fraud
and/or actual malice, entitling Plaintiff and the Class to an award of punitive damages to the extent allowed in an amount appropriate to punish or set an example of Citi. 294. As a direct and proximate result of the aforementioned wrongful conduct
committed by Citi, Plaintiff and the Class Members have suffered and will continue to suffer damages and economic loss in an amount to be proven at trial. Plaintiff and Class Members are entitled to damages and injunctive and declaratory relief as claimed below. TWLEVETH COUNT (Constructive Fraud/Negligent Misrepresentation) 295. Plaintiff incorporate by reference the allegations contained in the
preceding paragraphs as though fully set forth herein.
77
Filed 09/23/11 Page 78 of 82
Citi has a duty of good faith and fair dealing with respect to its dealings
with borrowers, including Plaintiff and Class Members. 297. Notwithstanding its duty of disclosure to Plaintiff and Class Members, Citi
negligently and/or recklessly misrepresented and/or failed to disclose material facts relating to Citis loan modification and foreclosure processes to Plaintiff and Class Members, including but not limited to: (1) Citi had properly processed modification documents; (2) Citi would make prompt decisions on modifications, although the bank kept many consumers waiting months longer than promised; (3) Citi would not foreclose upon consumers homes while modification requests were pending or while homeowners were making trial modification payments; (4) Citi had approved a loan modification, when it had not; (5) Citi would convert consumers to permanent modifications if and when they made the payments required by trial modification agreements, although many consumers who successfully completed their trial periods have not received permanent modifications; and/or that (6) Plaintiff and Class Members were delinquent on their mortgage payments and Citi was correctly charging them late fees, delinquent fees, and other charges, when Plaintiff and Class Members were making timely mortgage payments and were current on their mortgage. 298. The misrepresentations, omissions and concealments complained of herein
were material and were made on a uniform basis. 299. Plaintiff and Class Members reasonably and actually relied upon Citis
misrepresentations and omissions. Had Plaintiff and Class Members been aware of the true nature of Citis business practices, pursued other options to prevent foreclosure on. Such reliance may also be imputed, based upon the materiality of Citis wrongful conduct. 78
Filed 09/23/11 Page 79 of 82
As a direct and proximate result of the aforementioned wrongful conduct
committed by Citi, Plaintiff and the Class Members have suffered and will continue to suffer damages and economic loss in an amount to be proven at trial. Plaintiff and Class Members are entitled to damages and injunctive and declaratory relief as claimed below. 301. Plaintiff and Class Members were damaged, and are threatened with
additional harm, including, being charged late fees, excessive interest on principal amounts for which Citi refused to apply payments in a timely manner, adding substantially to mortgagors overall debt. Plaintiffs and Class Members have also suffered emotional distress, wrongfully being placed in imminent danger of losing their homes, impairment in their ability to sell their property, and attorneys fees in defending fraudulent foreclosures. Moreover, Plaintiff and Class Members have suffered damages, including, but not limited to, uncertainty of clear title, which causes a smaller pool of potential buyers, lowers home values, real estate owned sales resulting in higher deficiency judgment, and decreased time to negotiate a modification or workout of the loan. PRAYER FOR RELIEF WHEREFORE, Plaintiff prays that this case be certified and maintained as a class action and for judgment to be entered upon Defendant as follows: A. For economic and compensatory damages on behalf
of Plaintiff and all Class Members; B. C. D. E. For actual damages sustained; For emotional distress damages, as applicable; For treble damages, as applicable; For punitive damages, as otherwise applicable; 79
Case 4:11-cv-00443-RP -CFB Document 1 F. are unlawful; G.
Filed 09/23/11 Page 80 of 82
For declaratory relief, declaring that Citis actions
For an order of specific performance of Citis
contractual obligations; H. For injunctive relief, compelling Citi to cease its
unlawful actions; I. For reasonable attorneys fees, reimbursement of all
costs for the prosecution of this action, and pre-judgment and postjudgment interest; and J. For such other and further relief as this Court deems
just and appropriate. DEMAND FOR TRIAL BY JURY Plaintiff respectfully demands a trial by jury on all issues within the instant action so triable. Dated: 9/23/2011 By: /s/J Barton Goplerud J. Barton Goplerud Hudson MallaneyShindler& Anderson, P.C. 5015 Grand Ridge Drive, Ste. 100 West Des Moines, Iowa 50265 Tel: (515) 223-4567 Fax: (515) 223-8887 Email: ibgoplerud(HudsonLaw.net Jonathan W. Cuneo, Esq. Charles LaDuca, Esq. Matthew L. Wiener Brendan S. Thompson Cuneo Gilbert & LaDuca, LLP 507 C Street, NE Washington, DC 20002 Tel: (202) 789-3960 Fax: (202) 789-1813 80
Filed 09/23/11 Page 81 of 82
Preetpal Grewal, Esq. Cuneo Gilbert & LaDuca, LLP Rockefeller Center 620 Fifth Avenue New York, NY 10020 Tel: (202) 789-3960 Eric D. Holland Holland Groves Schneller & Stolze, LLC 300 North Tucker Boulevard, Suite 801 St. Louis, MO 63101 Tel: (314) 241-8111 Jerry Crawford, Esq. Nick Mauro, Esq. Crawford Quilty& Mauro Law Firm 666 Grand Avenue, Suite 1701 Des Moines, Iowa 50309 Tel: (515) 245-5420 Fax: (515) 245-5421 Lawrence J. Friscia, Esq. Friscia & Associates, LLC 17 Academy Street Penthouse Newark, New Jersey 07102 Tel: (973) 500-8024 Fax: (888) 809-3747 David I. Greenberger, Esq. Matthew J. McDonald, Esq. Liddle & Robinson, LLP 800 3 Avenue, 8th Floor New York, New York 10022 Tel: (212) 687-8500 Fax: (212) 687-1505 Charles E. Schaffer Levin Fishbein Sedran & Berman 510 Walnut Street Suite 500 Philadelphia, PA 91906 Tel: (215) 592-1500 Christopher M. Ellis Bolen Robinson and Ellis, LLP 81
Filed 09/23/11 Page 82 of 82
202 South Franklin Street, 2nd Floor Decatur, IL 62523 (217) 429-4296 Michael McShane Audet & Partners LLP 221 Main St. , Suite 1460 San Francisco, CA 94105 (41 5)-568-2555 Robert K. Shelquist Lockridge, Grindal, Nauen, P.L.L.P. 100 Washington Avenue S. Minneapolis, MN 55401 (612) 339-6900
82
Case 4:11-cv-00443-RP -CFB Document 1-1

JS 44 (Rev. 12/07)
CIVIL COVER SHEET
The JS 44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law, except as provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the Clerk of Court forthe purpose of initiating the civil docket sheet. (SEE INSTRUCTIONS ON THE REVERSE OF THE FORM.)
I. (a) PLAINTIFFS KEITH GOODYK, on behalf of himself and all others similarly situated
(b) County of Residence of First Listed Plaintiff
DEFENDANTS
CitiMortgage, Inc.
County of Residence of First Listed Defendant (IN U.S. PLAINTIFF CASES ONLY) NOTE: INLAND CONDEMNATION CASES, USE THE LOCATION OF THE LAND INVOLVED.
Marion
(EXCEPT IN U.S. PLAINTIFF CASES)
(c)
Attorneys (Firm Name, Address, and Telephone Number)
Attorneys (If Known)
J. Barton Goplerud, Hudson Mallaney Shindler & Anderson, P.c., 5015 Grand Ridge Dr.. Ste. 100, West Des Moines, IA 50265 (515) 223-456 III. CITIZENSHIP OF PRINCIPAL PARTIES(placean"X"in One Box for Plaintiff It. BASIS OF JURISDICTION (Place an"X"in One Box Only)
(For Diversity Cases Only) 0 1 U.S. Government Plaintiff 0 3 Federal Question (U.S. Government Not a Party) Citizen of This State and One Box for Defendant)
PTF BET 91 0 1 Incorporated or Principal Place

of Business In This State 02 0 2 Incorporated and Principal Place of Business In Another State 0 3 Foreign Nation
PTF
0 4
DEF
04
0 2 U.S. Government Defendant
X 4 Diversity (Indicate Citizenship of Parties in Item III)
Citizen of Another State
X 5
Citizen or Subject of a Foreign Country
03
0 6 0 6
TV NATTTP1 (iF QuIT ,:CONTRACT I

0 110 Insurance 0 120 Marine 0 130 Miller Act 0 140 Negotiable Instrument 0 150 Recovery of Overpayment & Enforcement of Judgment 0 151 Medicare Act 0 152 Recovery of Defaulted Student Loans (Excl. Veterans) 0 153 Recovery of Overpayment of Veterans Benefits 0 160 Stockholders Suits 190 Other Contract 0 195 Contract Product Liability 0 196 Franchise
TORITUREIPENALT PERSONAL INJURY PERSONAL INJURY

0 362 Personal Injury. Med. Malpractice 0 365 Personal Injury Product Liability 0 368 Asbestos Personal Injury Product Liability 310 Airplane 315 Airplane Product Liability 320 Assault, Libel & Slander 330 Federal Employers Liability 340 Marine 345 Marine Product Liability 350 Motor Vehicle 355 Motor Vehicle Product Liability 360 Other Personal Injury 0 610 Agriculture 0 620 Other Food & Drug 0 625 Drug Related Seizure of Property 21 USC 881 0 630 Liquor Laws 0 640 R.R. & Truck 0 650 Airline Regs. 0 660 Occupational Safety/Health 0 690 Other
ANXR1JPTCY
0 422 Appeal 28 USC 158 0 423 Withdrawal 28 USC 157 _______________ .PROPER1YiRI(HTS . 0 820 Copyrights 0 830 Patent 0 840 Trademark
i.
/:
OTHER STATIIrESS.th9Hil
0 0 0 0 0 0 0 0 0
PERSONAL PROPERTY
0 370 Other Fraud 0 371 Truth in Lending 0 380 Other Personal Property Damage 0 385 Property Damage Product Liability
LABOR
0 710 Fair Labor Standards Act 0 720 Labor/Mgmt. Relations 0 730 Labor/Mgmt.Reporting & Disclosure Act J 740 Railway Labor Act 0 790 Other Labor Litigation 0 791 EmpI. Ret. Inc. Security Act
SOCL4LSECIJR1TY
0 861 HIA (1395ff) 0 862 Black Lung (923) 0 863 DIWC/DIWW (405(g)) 0 864 SSID Title XVI 0 865 RSI (405(g))
..
_____________
IALPR1JP1RTY
0 210 Land Condemnation O 220 Foreclosure 0 230 Rent Lease & Ejectment 0 240 Torts to Land 0 245 Tort Product Liability 0 290 All Other Real Property
CIVIL RIGHTS
0 441 Voting 0 442 Employment 0 443 Housing/ Accommodations 0 444 Welfare 0 445 Amer. w/Bisabitities Employment 0 446 Amer. w/DisabilitiesOther 0 440 Other Civil Rights
PRISONER 1!ETrnON5
0 510 Motions to Vacate Sentence Habeas Corpus: 0 530 General 0 535 Death Penalty 0 540 Mandamus & Other 0 550 Civil Rights 0 555 Prison Condition
JTDERAL TAX SUITh

Cl 870 Taxes (U.S. Plaintiff or Defendant) 0 871 IRSThird Party 26 USC 7609
M1GRATIO
0 462 Naturalization App icstion 0 463 Habeas Corpus Alien Detainee 0 465 Other Immigration Actions
0 400 State Reapportionment 0 410 Antitrust 0 430 Banks and Banking 0 450 Commerce J 460 Deportation 0 470 Racketeer Influenced and Corrupt Organizations 0 480 Consumer Credit 0 490 Cable/Sat TV 0 810 Selective Service 850 Securities/Commodities/ Exchange 0 875 Customer Challenge 12 USC 3410 0 890 Other Statutory Actions 891 Agricultural Acts 0 J 892 Economic Stabilization Act 0 893 Environmental Matters 0 894 Energy Allocation Act 0 895 Freedom of Information Act 0 900Appeal of Fee Determination Under Equal Access to Justice 0 950 Constitutionality of State Statutes
V. ORIGIN 1 Original
Proceeding
(Place an "X" in One Box Only) 2 Removed from Stale Court
Remanded from Appellate Court
1 4 Reinstated or
Reopened
Transferred from another district (s p ecify)
6 Multidistrict
Litigation
Appeal to District Judge from Magistrate Judgment
Cite the U.S. Civil Statute under which you are filing (Do not cite jurisdictional statutes unless diversity):
VI. VII. VIII.
CAUSE OF ACTION Brief description of cause: REQUESTED IN

COMPLAINT:
28 U.S.C. Sect. 1332
Fraudulent Foreclosure Actions DEMAND S I CHECK IF THIS IS CLASS ACTION UNDER F.RC.P. 23 5,000,000.00
(See instructions): JUDGE SIGNATURE OF ATTORNEY OF RECO
CHECK YES only if demanded in complaint:
JURY DEMAND:
DOCKET NUMBER
9f Yes
0 No
RELATED CASE(S) IF ANY
DATE
09/23/2011
FOR OFFICE USE ONLY
RECEIPT 4 AMOUNT
/s/J. Barton Goplerud
APPLYING IFP
JUDGE
MAG. JUDGE
EXHIBIT A
Case 4:11-cv-00027-JAJ -TJS Document 29-3 Case 4:11-cv-00443-RP -CFB Document 1-2
Filed 04/08/11 Page 2 of 108 Filed 09/23/11 Page 2 of 20
EXHIBIT B
EXHIBIT C
EXHIBIT D
EXHIBIT E
EXHIBIT F

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Case 4:11-cv-00443-RP -CFB Document 1

Filed 09/23/11 Page 1 of 82

Civ. No.: PLAINTIFF DEMANDS A TRIAL BY JURY

CITIMORTGAGE, INC., Defendant.

Case 4:11-cv-00443-RP -CFB Document 1

Filed 09/23/11 Page 2 of 82

Case 4:11-cv-00443-RP -CFB Document 1 4.

Filed 09/23/11 Page 3 of 82

In particular, Citi utilized a computer system to automatically assess fees

Case 4:11-cv-00443-RP -CFB Document 1

Filed 09/23/11 Page 4 of 82

As a HAMP servicer, Citi aggressively and falsely advertised its

Case 4:11-cv-00443-RP -CFB Document 1

Filed 09/23/11 Page 5 of 82

Case 4:11-cv-00443-RP -CFB Document 1

Filed 09/23/11 Page 6 of 82

Case 4:11-cv-00443-RP -CFB Document 1 17.

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As servicer, Citi services loans it originated, as well as loans originated

Every home mortgage contains provisions specifying when payments are

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As part of its mortgage servicing operations, Citi collects monthly

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Case 4:11-cv-00443-RP -CFB Document 1 33.

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By this action, Plaintiff and Class Members seek restitution of all

The Foreclosure Crisis

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In 2007, as a result of irresponsible lending practices, Citi had to deal with

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Citi aggressively solicited its borrowers to apply for modifications through

ability to help homeowners stay in their homes when "life happens."

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Citi advertised its various homeowner assistance programs on its website,

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In response to Citis numerous solicitations, Plaintiff and Class Members

sought modification of their mortgage loans.

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Instead of being placed on reasonable parameters, the computer system is

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