Advice Please!

[Ann]

Hi everyone,
Hope everyone is doing good here. I haven't been here for a bit but here is a question I need answered on what to do next. Discharged from BK in August. Current on first mortgage not second. Trying to offer a settlement on second. Called and was basically laughed at with my offer. My case is being handled through the bankruptcy department. Offered another settlement and was told verbally no way. Sent a letter through certified mail with a 5% offer (owe $67,000 or so) and that was 2 weeks ago. I have not heard a single thing from them. Calling is a complete waste of time in my opinion. I'm way underwater with the second mortgage and just barely equal with my first as to what I may be able to sell my home for. Where do I go from here? We are talking about PNC Bank...oh and do you think they would really consider buying out the first ($189,000) just to foreclose on me? I know that sounds crazy but really these people are just that stubborn. Should I send another letter with another offer??? Help!!!

[SunshineGal]

I could be wrong, but I don't think PNC would have to "buy out" the first mortgage to forclose. More than likely, they would initiate foreclosure proceedings listing the 1st lender as a party to the transaction, and 1st lender would be able to file an objection. Then, whatever the property was sold for at auction would be applied to the 1st lien with the
2nd lender getting whatever was left over. The second would also have to pay all costs associated with the forclosure. In the meantime, you would have 6 months to redeem before they could evict you. It's a serious gamble on PNCs part and with the current market I doubt they would do it.

[Pandora]

... Discharged from BK in August. Current on first mortgage not second. Trying to offer a settlement on second. ..... I'm way underwater with the second mortgage and just barely equal with my first as to what I may be able to sell my home for.

Ok maybe I'm not understanding something and I hope someone can enlighten me so here are my questions:

why on earth would you want to settle your 2nd if you're just going to sell? I know you say you want to sell the house later, but are you absolutely certain that you will get more for the house than what you will owe? The market is still crashing - when were you looking to sell? Are you worried the 2nd will get monies if you sell it?

Have you factored in all fees associated with the sale of the home? You said the house is barely at its value now - and you havent even added in fees for listing, commission, etc.

Whats the cost benefit to you if you settle now vs. when you sell, assuming you can sell for more than what you owe?



You've been discharged of all personal responsibility and you didnt reaffirm - you can walk away at this point if you wanted to or even years from now.

[tcreegan]

Hi Ann,

Pandora has a good point, you are in no hurry on this, enough equity to cover the 2nd is at least a couple decades away and that is assuming the housing market has a strong recovery. Sometimes lenders won't come to the table until there is a long period of nonpayment, give them another 6 months and see what happens.

Just remember you have the upper hand!

Tom in Colo