Second Mortgage of 75K Refusing to Participate in HAFA and Demanding 34K

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?

 

Thank you,

Kim

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We were just told by an attorney at our office mtg. that this is becoming policy for PNC - they want 50-60% of their loan amount.   They actually left $30K on the table in one situation -they wanted more and walked after Wells Fargo offered them $30K - crazy - this is a public company leaving $ on the table.  

I agree that your seller needs to talk to a attorney - BK might be the best option and try to strip the 2nd lien.  Long process and will make short sale impossible - but might be best option for seller. 

Barabara, it isn't OTC.. sorry.. it is OTS- Office of Thrift Supervision... a department of the US Treasury.. now that should make  you all feel safe and cozy.. :) 



BARBARA WING said:

please excuse my ignorance.  but what is everyone talking about,,,,I don't know what OTC or OTS is !?!

Gloria Handley said:

Yes they certainly are.. never will deal with PNC bank again.. they would NOT cooperate and demanded minimum of 1/2 of the balance of $65K second.  I read right here on another thread that PNC had an investor directive issued early this year that stated PNC would get paid a higher % on the back end on their jr. liens IF there was NO other contributions from any other party including the first mortgage, agents and buyers.  I don't know if that's true, but I have learned to count on the agents here to give the best and most accurate information out available...  Anyway.. the house foreclosed a couple weeks later and quite honestly the seller was relieved to have it over with even though the outcome wasn't what he had hoped for.

Also.. we should all make sure we keep track of what PNC is doing... Jennifer Scott wrote above about them being in trouble with OTC.. maybe down the road our PNC borrowers should file a complaint or class action suit.  I would LOVE to see them get nailed.

 

 

 


Sean Underwood said:

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.

Kim, I recvd a short sale offer only to have the seller declare BK the same week (poor guy didn't know it would affect me and the buyer) ....2 months later I was contacted by the HOA to tell me that the property was released from the BK (apparently the buyers atty pleaded with the trustee) and that the HOA would work with me to get the short sale closed.  I am submitting the paperwork to the lender 8/22/11.   Will keep you tuned in as to whether or not you can do a short sale if the seller has declared BK.  because a BK would certainly cinch your deal and show PNC who is the BOSS!!!!

Actually sorry mine was a typo. Thought I got all those in edit mode. It is neither OTC or OTS. Office of Thrift Supervision is a retired name. It is OCC. Here is the link http://www.ots.treas.gov/?p=ThriftFinancialReports.

Who can keep up with all the name changes? A class action suit would cost a ton and they would drag it out for years.

Do what you are doing. Stick to your deal by deal strategies so you can make a living.

Gloria Handley said:

Barabara, it isn't OTC.. sorry.. it is OTS- Office of Thrift Supervision... a department of the US Treasury.. now that should make  you all feel safe and cozy.. :) 



BARBARA WING said:

please excuse my ignorance.  but what is everyone talking about,,,,I don't know what OTC or OTS is !?!

Gloria Handley said:

Yes they certainly are.. never will deal with PNC bank again.. they would NOT cooperate and demanded minimum of 1/2 of the balance of $65K second.  I read right here on another thread that PNC had an investor directive issued early this year that stated PNC would get paid a higher % on the back end on their jr. liens IF there was NO other contributions from any other party including the first mortgage, agents and buyers.  I don't know if that's true, but I have learned to count on the agents here to give the best and most accurate information out available...  Anyway.. the house foreclosed a couple weeks later and quite honestly the seller was relieved to have it over with even though the outcome wasn't what he had hoped for.

Also.. we should all make sure we keep track of what PNC is doing... Jennifer Scott wrote above about them being in trouble with OTC.. maybe down the road our PNC borrowers should file a complaint or class action suit.  I would LOVE to see them get nailed.

 

 

 


Sean Underwood said:

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.

Hey there Harry!  I did a short sale for a house that sold for only $50k but the seller took out an equity line for $100k.  Chase knew the seller had money in his 401k so they did approve the short sale but surprised me with an approval which stated basically my seller had to pay and would be on the hook for the taxes.  I told my seller 'hell no.'  We are waiting for the laws to change, otherwise he will have to file bankruptcy.  He prefers not to.  Have nice day Harry and I hope to see you soon!

Harry Clay said:

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.

Hi Barbara.

Just got through a Short Sale where the seller had filed bankruptcy.

Last year we had an approved short sale on the home (Chase was 1st lien holder & BOA was 2nd lien holder).

However, BOA offered an approval with conditions that were not acceptable to the seller.

BOA wanted a $10,000 Cash Contribution and a HUGE $35,000 Promissory Note.

So, the owners cancelled the Short Sale, lost the Buyer, and filed bankruptcy.

Their assigned trustee knew that the home was being used as a collectible asset in the bankruptcy, so certain rules were set for the owners to follow.

Only specific appliances were allowed to be taken from the home (e.g. Refrigerator, Washer, & Dryer).

The HOA was to be made current, and maintained.

Also, all services and utilities to the home were to be maintained (e.g. Pool Service, Lawn Service, Electricty & A/C were to be kept ON, & Water must be kept ON).

This was done to maintain the value of the home, while it was used as a collectible asset to the credit vendors the sellers owed money to.

There was a special exemption that was filed by their bankruptcy attorney, which enabled the property to be released and made available for a possible sale AFTER the bankruptcy was discharged.

I was informed by the judge that there is absolutely no way to perform a Short Sale while the tangible asset (the home) is part of the bankruptcy court, and is in ACTIVE status in the bankruptcy court.

The judge stated multiple times that Bankruptcy Court supersedes the Foreclosure Courts, therefore all foreclosures (or sales in lieu of foreclosure) must cease while the Bankruptcy Court is utilizing the tangible asset in the Bankruptcy.

This means the banks cannot move forward with the foreclosure and no Short Sales could be performed.

As long as the home was not taken by a credit vendor, or granted to a credit vendor by the judge, the home would be placed back in foreclosure AFTER the bankruptcy was discharged.

During the bankruptcy BOA was given $0 for the 2nd lien amount.

So, the BOA debt was marked as "Noncollectable", but the BOA lien was not released until foreclosure occurred.

So, once the Bankruptcy was discharged, the home was placed back in the Foreclosure Court.

JP Morgan Chase was the only real party to deal with, although BOA retained their lien.

The owner was current on his HOA, so the property was cleared of all other liens (this definitely helped).

I was able to sell the home as a Short Sale.

I immediately placed the home in ACTIVE status.

We had a cash offer within days.

However, I had to get JP Morgan Chase to pay BOA for a release of the lien.

BOA settled for $6000 from Chase and we closed in 32 days from re-listing the home.

Once considered "Noncollectable", the Short Sale process is VERY fast.

However, those agents dealing with this scenario MUST inform the bank (by written bankruptcy documents) that the seller is Noncollectable.

Otherwise the bank will demand the same process that usually occurs.

 

Hope this helps.

Happy negotiating :)

 


BARBARA WING said:

Kim, I recvd a short sale offer only to have the seller declare BK the same week (poor guy didn't know it would affect me and the buyer) ....2 months later I was contacted by the HOA to tell me that the property was released from the BK (apparently the buyers atty pleaded with the trustee) and that the HOA would work with me to get the short sale closed.  I am submitting the paperwork to the lender 8/22/11.   Will keep you tuned in as to whether or not you can do a short sale if the seller has declared BK.  because a BK would certainly cinch your deal and show PNC who is the BOSS!!!!
They sometimes like to play hardball...Enrique's reply is a good start...I have three words for you ESCALATE, ESCALATE, ESCALATE. It would be helpful for you to klnow whether or not the 2nd is a chargeoff  The charge-off departments can be fussy.  Keep asking for what you want until they tell you NO, and tell tell they are going to report you for stalking...Point is, do they wnat that much??? YES...Will they ever get it??? NO!!!! If all else fails, then you can threaten BK and strip the 2nd.  BK stops the foreclosure process and stalls everything...If they still don't waffle...then do the BK and stall them...Don't get mad, get one better!  Good luck...Oh, and the Banks job is to squeeze as much money as they can out of all parties...And they will lie to do it!  So, keep going back and tell them what you need them to do to help themselves...
Pnc just bought RBC, and RBC followed the same rules.. Not fair, but not much you can do other than talk to a bankruptcy atty...

they actually merged some years ago with OCC.. not sure when.  I lived through the S&L crisis during the 80's and early 90's so it will always seem like the OTS to me.  :)   PNC got bail out money and all they did was buy other banks.. or some part of it.  So the bail out that was given to PNC did nothing to help the consumer ??  Yes, the OTS or OCC or whatever they are called should investigate and the people that are paying for the "bail outs" can't even get a reasonable request for a short sale???  In June they bought all US retail operations from Royal Bank of Canada for 3.45 BILLION dollars.. so lets help a bank in Canada with bail out funds and abandon all help for U.S. homeowners??  Brilliant.  I found this out while trying to find SOMEBODY at PNC that I could escalate to,  but no such luck.  Just my two cents and won't add more as this isn't necessarily the place to air this sort of thing I suppose. 



Jennifer Scott said:

Actually sorry mine was a typo. Thought I got all those in edit mode. It is neither OTC or OTS. Office of Thrift Supervision is a retired name. It is OCC. Here is the link http://www.ots.treas.gov/?p=ThriftFinancialReports.

Who can keep up with all the name changes? A class action suit would cost a ton and they would drag it out for years.

Do what you are doing. Stick to your deal by deal strategies so you can make a living.

Gloria Handley said:

Barabara, it isn't OTC.. sorry.. it is OTS- Office of Thrift Supervision... a department of the US Treasury.. now that should make  you all feel safe and cozy.. :) 



BARBARA WING said:

please excuse my ignorance.  but what is everyone talking about,,,,I don't know what OTC or OTS is !?!

Gloria Handley said:

Yes they certainly are.. never will deal with PNC bank again.. they would NOT cooperate and demanded minimum of 1/2 of the balance of $65K second.  I read right here on another thread that PNC had an investor directive issued early this year that stated PNC would get paid a higher % on the back end on their jr. liens IF there was NO other contributions from any other party including the first mortgage, agents and buyers.  I don't know if that's true, but I have learned to count on the agents here to give the best and most accurate information out available...  Anyway.. the house foreclosed a couple weeks later and quite honestly the seller was relieved to have it over with even though the outcome wasn't what he had hoped for.

Also.. we should all make sure we keep track of what PNC is doing... Jennifer Scott wrote above about them being in trouble with OTC.. maybe down the road our PNC borrowers should file a complaint or class action suit.  I would LOVE to see them get nailed.

 

 

 


Sean Underwood said:

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.

Kim,

I am thinking that you are dealing through E*Trade (or at least their collection service).  I have had two situations identical to this.  You have got to get to PNC directly.  They are listed as a participating Subscriber to HAFA.  on both of mine they finally agreed to accept the $6k but only after I bypassed the servicing company.

 

Attachments:
I believe there has been legislation passed requiring servicing firm to provide you with investor name and contact info. May have to demand it but I'm sure they are required to provide for just such situations that are wayyyy to common.  Good luck!

I feel for you having to deal with PNC.  They blow up deals like crazy.  Basically they do participate in HAFA and they will lie to you and tell you they don't.  Email me at [email protected] and I will give you the name of someone there who is realistic and helpful. 

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