So, this nice couple thought that the bank has already taken over the property and were surprised to learn that Citi has not even filed a foreclosure action yet.

Based on your feedback, it's looking like the best course of action is to sit tight and bump rent up upon lease renewal to increase cash flow.

@Bill S. ...exactly, no matter the cost, it will take Action...I also believe working with someone locally will be more beneficial..

Do your homework and take action.  

We are installing a new shower surround, the plumber just put in a new toilet, we are insulating the basement and replacing 2 windows to help with the heating costs, and putting in a hardwood floor in the living room to replace worn out carpet.

Reading a lot of post and a couple of blogs and podcasts. found potential flip/sell deals working with a realtor but unable to take action because of lack of experience and enough capital.

This will depend on whether or not the Borrower has already done this either through their own actions (asking for relief) or through the actions of the Mortgagee or Servicer (contacting the Borrow with alternatives to foreclosure).A FC attorney would have to bring forth concepts to stall or stop the foreclosure.  

Chad, Congrats on taking action!

Then there is the occasional leaky toilet, dead water heater, bad roof, etc.  

@Chad Carson , have you gone through quiet title actions?