Need good advice on how to deal with this

[Ann]

All,
I posted this almost word for word on the loansafe website and have gotten some feedback but would really like some good sound advice from you good people here who have always given me great advice during my bankruptcy. Thanks to all who reply! Here it is...Long story short...was discharged of a chapter 7 last August. Have a first mortgage with Citi and a second with Pnc...neither were confirmed. Have been current with first but stopped paying on second since June 2010...Would like to stay in house for a few more years but our home is pretty much worth what we owe on our first mortgage so at this point Pnc would get little or nothing to try to foreclose. We attempted to settle with them for a complete release of the lien in September at 5% but was pretty much laughed at by them with that offer...balance is around 70,000 so they were not willing to accept the 5 % of that some months back...fast forward to January 2011 and I just received a letter and phone call (they were very very careful not to ask for money which would violate the chapter 7 discharge) but did want to know my intentions. I told them make an offer to settle and she said 90 %....I said not going to happen....she said 5 % is way too low..she then said I could fax over to them a letter to accept a new offer but it would have to be more than 5%...I said 10% is the absolute most I would be willing to offer since that is all I have anyway...we ended the conversation with her saying someone from the "short sale" department would contact me about a possible settlement but that I would have to send over all my financial information for them to even consider!....here is my big concern....I don't want to sell...just settle with a full release of the lien and why do I have to supply them with anything??? I have been released of my obligation to pay this debt. I'm concerned they will see a little left over after all our bills and say ...oh you have plenty to pay us and no we are not going to accept your offer. Can anyone help me here with this? I have be warned about dealing with Pnc from others about how tough they are to settle with. Also what are my chances of them really accepting my 10% offer? Also one thing I did not mention is that I was told by someone at Pnc that they may have to send my "case" to their "recovery" department if I do not either pay or send in what is needed to even look at my case. Recovery? Please anyone??

[debrouillant]

My ex is going through this right now - what you want to keep in mind is that the fact that they CAN foreclose on your house is really their negotiating point. Doesnt make sense that they would, since there is no equity, but they CAN. Highly doubt they would go through with a foreclosure at this point.

[OhioFiler]

At this point in time you are the one negotiating from a point of strength but you are acting as though the bank has the upper hand. They have an essentially unsecured mortgage as their only remedy is foreclosure and the net proceeds will be negative for them. Be firm. Don't be intimidated by "threats" like Short Sale Department or Recovery Unit. What those mean is pretty much the person sitting next to the caller.

Show them with valid appraisal information what the home is worth. Make them a final offer (that you are able to actually commit to doing). They will have 3 options: Accept your offer, refuse your offer and get nothing or play a waiting game for years waiting for the market to build equity in your property sufficient for them to foreclose.

[Ann]

Thank you for your input. They just called saying they are from "the short sale department" saying I requested a short sale packet???? I never requested this. This is what was told to me on Friday...that I need to go through the short sale department. I didn't answer but they are expecting a call back. Should I ask them what exactly do they mean by the short sale department and tell them I am not looking to sell just settle? Anyone?? Also, if this really is where I need to direct my offer to settle I feel like others have said that I do not need to give them any financial information...how do I actually say that to them?

[tcreegan]

Hi Ann,

You aren't talking to the right level in the company. Ask bluntly, "Do you have actual authority to negotiate terms in a settlement?" Well, first we need your fiancia... "Excuse me, do you actually have the authority to agree to terms in a settlement? If not, can you give me the name and contact info for someone who does." An alternative approach would be research the top corporate structure and see if you can get into a VPs office, their secretary probably knows the right person to talk to.

You're in no hurry, more payments missing motivates the lender to get something once they realize they could get nothing. Look around the forum, seen at least 2 threads in the last few days about peoples experience in settling a 2nd. Going price seems to be around 5%

Well, good luck with this, hope it turns out well for you!

Tomi in Colo

[Ann]

Thanks again for your input...here is another question about this..IF they decide they are not taking my offer and the debt gets sold to another company how likely is that company going to be able to release the lien? Really that is all I'm worried about here. Does anyone here know?

[Pandora]

Thanks again for your input...here is another question about this..IF they decide they are not taking my offer and the debt gets sold to another company how likely is that company going to be able to release the lien? Really that is all I'm worried about here. Does anyone here know?

Most times the lien doesnt transfer with the debt... it stays with the org. lender. You need to call the org. lender and ask who holds the lien when the debt is sold / transferred.

My question to you is what do you owe to your 1st mortg. and the value of your house since your 2nd is saying they will foreclose or that you must short sale? Have they gotten the 1st to agree to release their interest since you arent late in paying the 1st and has the 1st agreed to allow a short sale? If the 2nd forecloses, they have to pay the 1st anyway... so... call their bluff.

You do not have to provide them with diddly - and I wouldnt. You arent obligated to them at this point, it was discharged. Can they foreclose? Yep... question is... will they? Probably not.

[Pandora]

BTW: PNC is awful to work with - they're our 1st note holder and HAMP was a nightmare. Have you called Ms. Dishman in the Exec. Office, or asked for Mr. Cummingham?

[Ann]

Hi Pandora,
Thanks for your reply. Yes, I know PNC are very difficult to work with. Right now the only people that seem to be contacting me are from the bankruptcy department and yesterday someone from the short sale department. If a company were to buy the debt from PNC then how would I be able to ever get the lien released? As of now I owe $187,000 and some change on my first mortgage...I MIGHT be able to sell for that right now but honestly I have no idea...if I could sell for more I'm pretty sure it certainly wouldn't be for very much more than that. My second is around $70,000 with PNC...I have not talked with anyone you mentioned. I did last night however type up another offer to settle but instead of the 10% I put $5,000.00 and told them I would not be making anymore payments on this loan and I would not be borrowing anymore to satisfy whatever their counter offer might be. I also told them they would not be getting any new financial information since I legally do not have to supply them with anything after my discharge. I have yet to fax that to them though. Just waiting to see if they are going to contact me again. I just hope my letter to them doesn't make me sound too "smug". I really do not want them to view me in such a way that they just plain out refuse to work with me. Any thoughts here???

[screentest]

Hi Ann,

Just my take on this. Your in the drivers seat here! You owe them nothing and all they have is a worthless lien on your property. You stated you only want to live in the residence for few more years so why are you entertaining PNC at all at this stage?

I would worry about a lien release if and when I decide to sell and I was able to verify the actual value of the house at the time I listed the home. If you have little or no equity, then a lien release from the 2nd is worthless to you. Nobody can say for sure what the value will be in a couple of years so PNC just has to sit and play the waiting game. Just make the payment on the first mortgage as long as you want to stay there and let PNC go skydiving without a parachute.

In order for PNC to realize any recovery they have to buy your house from the first lender and then go through the costly foreclosure process. Good luck with that PNC!

Ann, Keep this deal in a business perspective. You are not "Ann" to them. You are only an account number on a computer screen and they are bill collectors trying to pull anything they can from your checking account and they are preying on your emotions involving the house. This is a non-emotional, business, bill collecting transaction to them only. You are one of only thousands of people they try this on everyday of the week.

Don't let them or the stress bother you. Let it go and enjoy your new freedoms from financial slavery!

P.S. I had the same conversation with my in-laws when we went through this last year. They are VERY old-school and thought everybody at Wells Fargo new them by name and every hand-shake was a deal.

Good Luck
ST