Replies to This Discussion

Permalink Reply by SE Davis on February 20, 2013 at 9:35am

AnaLee;

PNC can be difficult to work with although I believe that they have improved a great deal in the last 6 months.

Some Sellers have high income and large retirement account balances I always try to analyze why this type of condition is being required. If they are trying to poach on your clients retirement there is a specific rebuttal to that.

You wrote> $44552.07 (not a huge deficiency). If that is 65% of the outstanding loan balance then that is huge. The NPV sometimes matters more than the dollar amount of their loss.

Try having your seller client write/sign a one page counter proposal to the $25,000 promissory note perhaps offering $500 or $1000 cash contribution or something and challenge some of the their non-sense you've mentioned. This intended to engage them in a re-negotiation.

A RESPA-QWR may flesh out the names of the mortgage insurance company and the investor. However they are allowed a lot of time to comply with that. You may should have sent that back in Sept/Oct 2012 as soon as they started acting uncooperative.

There is always the OCC complaint and some other options to turn up the heat. However PNC is still winding their way out of nearly 10,000 civil lawsuits so they don't seem to care about lending laws.

You can ask that the file be re-assigned to another negotiator by re-submitting a whole new package.

Otherwise just keep pounding them.

Good luck!

Permalink Reply by AnaLee Schnell on February 21, 2013 at 6:26am

Thank you for your reply.. the total owed on the loan is $284,552.07. and I have an offer for $240,000.00 which is how I figured out the deficiency.. 16% of what is owed total is what the deficiency is. 

I escalated the file to a supervisor and this is what she said to me:

The loan was sold as part of a pool of loans to the current investor /
owner of the note in which we are servicing.  As part of  the agreement the
investor required Pool Mortgage Insurance be placed on all the loans to
help off set any loss they would see in the event any of the loans
defaulted.  The investor paid the MI premiums on this loan, not the seller.
The MI Company has every right to request a promissory note or cash
contribution to help off set the amount of the loss they will see in a
short sale situation.  We need to know if the seller is going to agree to a
promissory note or possibly a cash contribution before we can move on to
submitting the file to the investor.  They have requested $25,000 in a
promissory note, if this amount isn't feasible the seller can counter or
they can counter back with a cash contribution in lieu of the note.  If
they agree to a promissory note the note itself would not need to be signed
until the transaction closes so there isn't a risk in agreeing to something
and then the closing doesn't take place.  However, if the seller agrees now
and an approval is issued from both the MI and the investor and then
decides not to sign the note at closing then the short sale approval would
be denied and our file closed.

Permalink Reply by SE Davis on February 21, 2013 at 6:44am

That message clearly outlines your rebuttal strategy.

If those numbers are accurate that is an NPV of 84.34%. It is difficult to know exactly how much a lender is determining their default balance total to be.

Based on your numbers the $25,000 promissory note pushes that NPV to 93.12%.  

Consider having your seller to offer in writing cash contribution pushing it to 85%. Offer them a $1,000 up to $1878 if they are able and willing.

Otherwise challenge and dispute the the whole thing in writing.

 

 

They are being totally unreasonable.

Permalink Reply by SE Davis on February 21, 2013 at 7:45am

AnaLee

The net disbursement dollar amount to PNC on your Preliminary HUD1 Line 504 divided by $284,552.07 = NPV%.

When you calculate the correct numbers, my guess is that equals approximately 76%. The amount of your proposed loss to the bank is closer to 24% of their default balance.

You have not mentioned anything about your seller. Are they devastated financially and struggling to put food on the table for their children? Or are they in some other slightly better financial condition? This matters and the bank has made their own determination of this with the docs you sent them.

This is not so unreasonable and of course they can do whatever they want.

 

Permalink Reply by Justin Berry on February 21, 2013 at 8:11am

I use jigsaw.com for PNC supervisor contacts...you can get pretty far.

SE Davis' approach is spot on. They usually go after this if they see room in the seller's financials.  I have been successful in overcoming these types of situations by having the seller update their financial worksheet and hardship letter, especially if it has been a few months.  PNC is a tough one though.....