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Permalink Reply by Wendy Rulnick on August 18, 2011 at 9:08am

Wendy - Is this on their approval letter to your client, or is this a document they are requesting along with others for short sale consideration? I don't know how their blanket form can apply to all their investors.

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Permalink Reply by Wendy Martin on August 18, 2011 at 11:23am

Hi Wendy,

 

This form came with the initial short sale packet.  Never seen anything like it.  I'll be sure to let everyone know what the contact from PNC says when I return their call today.  Thanks!

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Permalink Reply by Sam on August 19, 2011 at 3:55am

First, I would always recommend to my clients that they do what is in their best interest, even if that is letting go to forclosure and losing out on the sale.  You have to place their well being at the front if you want to be successful in the short sale business.

 

That being said, and the good news, it is rarely better to let go to forclosure.  In the scenario above, will the second lien PNC have the right to persue deficiency if the property forecloses?  If so, why then would foreclosure be better?  Perhaps the difference/advantage would be minimized, but not better.  Not to mention the first lien, can they persue deficiency in foreclosure?  If so, and they are willing to waive in short sale, then there is a substantial advantage to short sale, even if the second will not waive deficiency.

 

The reality is that unless HAFA, the second liens traditionally will not accept the small consideration from a short sale a settlement of the debt, and in some cases the first lien holder will not either.  Your client should have been made aware of this early in the process.  You have to give it to them straight, at the beginning.  Short sales are not fun, they should not be taken lightly, they are painful, they come with credit pain and many times financial pain, just less painful then forclosure.

 

While the language is certainly harsh, the reality is that they are appropriately making sure that your client is aware of the fact that they will not be waiving deficiency, which is a good thing.  Not a good thing that they are not waiving deficiency, but a good thing that your clients will find this out early in the game and not at the finish line.

 

PNC will settle by the way, but they will normally require additional funds over and above what the first lien holder will contribute.  Get the first lien holder to confirm if the buyer, seller, agents or a combination of the three can contribute additional funds to the second lien.  If they say yes, then you try to get a low offer approved by the first lien so the buyer is willing to write an extra check at closing to the second for full settlement.  As long as this is allowed and disclosed it is perfectly appropriate and how you can best serve your clients.

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Permalink Reply by Corinn on August 19, 2011 at 5:12am

We have had our clients cross that line out and initial it since we are trying to negotiate the short sale as payment in full.  It has worked with some files, and not with others, but we don't want them to agree to a deficiency right off the bat.  I do agree with what Sam said, PNC will settle.

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Permalink Reply by Becky Martin on August 19, 2011 at 5:32am

Do you have any contact numbers to escalate a file?  They are just a nightmare!  I have one now with the 1st and 2nd with PNC:(

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