Forum

I would appreciate advise.

Family's mortgage is current and not upside down but loss of job is forcing them to try to renegotiate loan with PNC to avoid loosing their home. They are up to date on all payments including home insurance and property taxes.

PNC denied loan modification but upon insistence, they are apparently reviewing it now pending approval or new denial. They have opened escrow under HAMP - apparently required by government - and are requesting family pays a 'shortage' amount to cover insurance and escrow, even though they are up to date and have been paying them separately. In addition, after paying this, PNC states that after paying this shortage amount, their monthly mortgage payment will go up by $900.00.

In essence, this preemptive action will cause the client to default since they can not even afford their current mortgage for loss of income.

PNC states the above procedures are required under HAMP and requesting they stop above charges will cancel the escrow and the chance to be reconsidered for loan modification.

Questions:

1. what can be done to have PNC not impose this shortage?

2. since there is no written agreement between client and PNC on a loan modification (it has not yet been approved) if the client continues to make 'regular' payments and ignore the shortage amount and increased payments until a decision to modified loan is made, can PNC force the client to default or do something similar?

Thank you for replying.