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Does anyone know of any options for a seller when the second mortgager PNC refuses to particpate in HAFA? Has anyone seen the first mortgages allow the seconds through a regular short sale receive 30K when the first is being shorted by over 200K?
If PNC refuses to cooperate, & prefers to play the spoiler in 2nd position, that is their right.
Conversely, your client has the right to discuss legal options regarding stripping that 2nd lien with a bankruptcy attorney.
But that also means a short sale may be unattainable, & your client may very well face foreclosure @ the Trustee Sale.
Given your scenario, I think it would be very prudent for your client to speak with an attorney asap.
Just as an add-on to your reply - you can proceed with the short sale with the trustees approval if the client files bankruptcy and surrenders the property. I have dont it. Also this can make things eadsier because now you will be dealing with the BK dept at PNC not loss mitigation and they are MUCH more realistic.
Currently doing that option with PNC. Had lien strip motion in place, they objected to debtors/sellers plan but we worked out an agreement with their bankruptcy counsel to approve the plan which includes the short sale approval and payments. They wanted us to still run it formally through their short sale department though the agreements and court orders were in place. PNC negotiator came back claiming the investor is demanding $30,000 to release the lien. The bankruptcy court orders give them $6,000 and the deficiency amount put into the seller/debtor bankruptcy for payment through their approved plan which will actually pay them about 60% of their $154,000 claim.
We just received BofA approval with $6k to PNC so I am following up my previous demand letter which threatened to bring an action against PNC and the investor for violation of the bankrupcy orders and automatic stay if they didn't abide by the orders which their bankruptcy counsel had wisely agreed to for them. Said violations are not looked upon lightly by the bankruptcy court and they will award punitive damages, actual damages, attorney fees and costs. We are suppose to hear back from PNC's negotiator this week or we are following through on filing the motion against PNC in bankruptcy court.
Bankruptcy does potentially gum things up, but it keeps the property from being foreclosed upon, potentially more time for your clients to stay in the property payment free and it protects your commission that you have been working hard to earn.
I will post back with our final results when we have them.
Just closed a deal where PNC not only refused to play along with the primary mortgager, a local bank that was taking a $250,000 bath on the property but still negotiated in good faith, but PNC also changed its mind mid-way thru on what it would take. Needles to say, it scoffed at the $3000 offered by first mortgage holder -- and demanded $20,000 on its $48,000 HELOC, then turned down the $20,000 when my clients came up with it through relatives -- and upped the ante another $8000, claiming the $20,000 counter had been more of a conversation than a counter. I don't think so. We had it in writing. But I did learn that PNC is tough as nails, so pleading for mercy is worthless. Indeed, in this case, the sellers were highly motivated to get out from under and, thankfully, had family members to help. Otherwise, the deal would have been dead even though the buyers were actually amazingly paying market value, and it was the best case scenario for all concerned.
PNC = Pain N Crotch
Thought you'd like that :)
They are even horrible when it's a stacked file (PNC holds 1st & 2nd).
When it's stacked, they demand that the 2nd retain 10% of it's value on the Closing Statement.... and they have a new Deficiency Agreement that ALL Sellers must now sign.... Welcome to the PNC world.
Awesome info Jennifer!
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