Cash contributions when PNC is the 2nd
This may be more of a "general" question, but here is a specific scenario:
Seller has 2 mortgages. First mortgage is Bank of America, 2nd is PNC. BOA has agreed to give $1,500 to PNC. PNC is requiring $9,000 for full satisfaction and release.
The seller is willing to give PNC the difference of $7,500, but it can't be on the HUD as a cash contribution at closing or else BOA won't approve the HUD. The only other option I see is to have the seller wire the $7,500 prior to closing and PNC will then issue an updated short sale letter showing that the amount due to them is $1,500.
But..... What if the closing doesn't happen for whatever reason? What if the buyer loses his job the day before closing?
Is there anyway around this?
Thanks
Replies to This Discussion
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Permalink Reply by Abraham Walker on
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Couldn't the seller sign a promissory note for the $7,500 and pay it after the closing.
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Permalink Reply by Joe Barnwell on
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That might work.... what if PNC won't do that?
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Permalink Reply by Shannon Jones on
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I've got a very similar situation, but I'm not nearly as close as you. I have a short sale we're trying to reach agreement on with a BofA 1st and PNC 2nd as well. The first two BofA counters offered ZERO to PNC. Now they've increased it to $3,000, but PNC is demanding $19,000 (on a loan balance of $49,000 - so this seems excessive). I can come up with $1,000 contribution from the seller and another $5,000 from the buyer, but need to figure out how to handle that contribution in a way BofA will allow AND how to get PNC to agree to $9,000 instead of $19,000. Any ideas??? Would love suggestions!!!
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Shannon - that is a tough situation... I think that the $5,000 from the buyer can be disclosed on the HUD, but the $1,000 from the seller I'm not so sure that BOA will allow.
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Have the seller make a payment to the second lender prior to closing to reduce the amount owed and request a new payoff. That way it will not show in the HUD. Just make sure you can get a new adjusted payoff first.
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I closed on my Short sale on Sept 30th; it was 18 mos of head ache and sleepless nights. BofA accepted a 210K short sale when I owed them 234K, The second – E*TRADE CLC was for 49K, of that the Realtor got something like 10K, PNC CLC second lien holder, was given $4037.00 to release the lien. On top of that I kicked in $3000.00 to PNC CLC for a total of about &7034.00 or aprox 15%. For their part BofA released me of any further obligation and waived any right to further collections. BoFA said that they will send me a 1099.
PNC CLC on the other hand placed a “charge off” of about 43K on my credit reports on Oct 7th just days after closing and days after they received 15% of a 49K HELOC . And way before they even asked for a settlement. Fast forward; I didn’t know about the charge off until I tried to get a small loan for the settlement money. Getting back; On November 2nd I received a letter from CLC’s recovery department with instructions to call them. After calling for about a week and getting recordings and leaving messages I got a “Recovery Specialist” to call me. She was very polite. She got right to the point and said that “ “E*TRADE CLC wants to settle for 13K” unquote. I flat out told her that I was drop dead broke after this and that a “one time cash payment of 13K was unrealistic” and that all I could come up with was 4K – maybe. She countered with 6K. I said that I would try. She then sent me a request for hardship letter, and financial documents which I sent on Nov 12th. That’s where it stands right now. If I agree to 6K than E*TRADE CLC will have received about 30% of the total.
I have no problem showing the financial mess that I’m in, wife sick and out of work, 21K in unsecured dept being handled through ACCC, 3K in new medical bills, another mortgage payment on my primary. I learned about the charge off after I tried getting a small loan for the 6K if it comes to that. So CLC is looking for settlement cash after they place a charge off on my report knowing full well the ramifications to your credit score.
I’ll keep you posted, anyone been where I am or is heading that way. Would like to read comments. -
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Permalink Reply by Zach Shepard on
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This is not good news! I'm looking for some answers on how to deal w/ PNC Bank (which holds the 2nd). The 1st is w/ PNC Mortgage, and even they say its tough to deal w/ PNC Bank when its the 2nd. The negotaitor is requesting 10% of the loan bal ($78,600) at the closing, PLUS she wants the seller to sign a promissory note for the remainder, $70k!!! I about told her to go jump out the window... but I held back.
The 1st is only allowing $3k to the 2nd, so I think I can figure the payoff out if the seller sends in money prior to closing, but I can't get them to budge off this massive promissory note. What the hell??
Anyone run up against this situation? How do I get them to back off the PN? HELP! Thanks for any advice!
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