PNC $200k Second, Defaulted 5 years ago and still no word. Any suggestions please?

sd20forme

LoanSafe Member
Sep 7, 2019
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0
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We have a $200k second with PNC behind our Chase first of $375. We stopped making payments September of 2014. We have not heard anything from them and would really like to get this resolved. Any suggestions would be appreciated! Thank you!
 
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Chasegame2019

Guest
Best if you can provide more details. Current home value ? Back in 2014 did you file BK? If yes, was the loan reaffirmed? (hopefully not).
 

sd20forme

LoanSafe Member
Sep 7, 2019
5
0
1
The house value is approximately $800k and no bankruptcy was filed. We had a third that we settled with Chase. The PNC Heloc was taken out several years after we purchased the home. Thank you!
 

Jzone

LoanSafe Member
Jun 20, 2017
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Start by checking with your county register of deeds to see who has the lien on the property. PNC has probably sold/assigned any interest in the property by now. Without bankruptcy protection, you are still liable for the debt.

You will only want to negotiate with the lien holder at this point. That may still be PNC, but unlikely. After 5 years of no payments, its likely been sold to a debt collector.

Did you ever recieve any notices from PNC?

You would of most likely recieved late payments notices starting 60 days after your first missed payment.
 
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Chasegame2019

Guest
It's all about the math. I'm just quoting from Tom Eason's Strategy for Settling Seconds (see archives here). As a general rule, PNC's (or whoever owns the note now) decision, to settle with you or foreclose will be based upon the math. To foreclose-they will assume you have approx $50k in fix up costs they will have to spend to bring the home into sellable condition. They will add in 6% ($48k) at least, for commissions and closing costs. They will add in the the $375k first they will have to payoff. Then they will subtract all of that from the current home value-

$800,000 less $375,000 less $48,000 less $50,000= $327,000 net positive.

$327,000 is a lot of incentive for the second TD holder to foreclose or just wait you out, and very little incentive to accept any type of settlement offer from you.

Don't be discouraged, just be aware of how the lender views your situation. I would send them a hardship letter (brief) and offer 2-3% as a settlement. Then go silent. Do not take their phone calls. You have substantial equity and in my opinion repeated attempts to contact or speak with the lender is just poking the bear.

Your best shot at a settlement is if the lenders own situation somehow changes. This we think, is what happened in our situation.
 
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sd20forme

LoanSafe Member
Sep 7, 2019
5
0
1
Start by checking with your county register of deeds to see who has the lien on the property. PNC has probably sold/assigned any interest in the property by now. Without bankruptcy protection, you are still liable for the debt.

You will only want to negotiate with the lien holder at this point. That may still be PNC, but unlikely. After 5 years of no payments, its likely been sold to a debt collector.

Did you ever recieve any notices from PNC?

You would of most likely recieved late payments notices starting 60 days after your first missed payment.
Start by checking with your county register of deeds to see who has the lien on the property. PNC has probably sold/assigned any interest in the property by now. Without bankruptcy protection, you are still liable for the debt.

You will only want to negotiate with the lien holder at this point. That may still be PNC, but unlikely. After 5 years of no payments, its likely been sold to a debt collector.

Did you ever recieve any notices from PNC?

You would of most likely recieved late payments notices starting 60 days after your first missed payment.
Thanks for your input! I am pretty sure PNC still owns it but will double check. We have never received anything from PNC (mail or phone) but we did ask to be put on the do not call list. I am worried they might ry and foreclose. Just wonder if they do try and foreclose, if we can begin making payments again and avoid the foreclose. We are back on our feet again after having some rough years... Thanks again!
 

sd20forme

LoanSafe Member
Sep 7, 2019
5
0
1
It's all about the math. I'm just quoting from Tom Eason's Strategy for Settling Seconds (see archives here). As a general rule, PNC's (or whoever owns the note now) decision, to settle with you or foreclose will be based upon the math. To foreclose-they will assume you have approx $50k in fix up costs they will have to spend to bring the home into sellable condition. They will add in 6% ($48k) at least, for commissions and closing costs. They will add in the the $375k first they will have to payoff. Then they will subtract all of that from the current home value-

$800,000 less $375,000 less $48,000 less $50,000= $327,000 net positive.

$327,000 is a lot of incentive for the second TD holder to foreclose or just wait you out, and very little incentive to accept any type of settlement offer from you.

Don't be discouraged, just be aware of how the lender views your situation. I would send them a hardship letter (brief) and offer 2-3% as a settlement. Then go silent. Do not take their phone calls. You have substantial equity and in my opinion repeated attempts to contact or speak with the lender is just poking the bear.

Your best shot at a settlement is if the lenders own situation somehow changes. This we think, is what happened in our situation.
Thanks for your input! I am definitely worried about foreclosure. Do you know if they start to foreclose, would they negotiate with us to make payments rather than a lump sum? I will for sure consider sending them a hardship letter with the 2-3% offer. Thank you again! Glad you were able to settle your!
 
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Chasegame2019

Guest
Thanks for your input! I am definitely worried about foreclosure. Do you know if they start to foreclose, would they negotiate with us to make payments rather than a lump sum? I will for sure consider sending them a hardship letter with the 2-3% offer. Thank you again! Glad you were able to settle your!
Not sure where you are, but be careful about the lenders motivation if they offer you 'payments'. The Statute of Limitations (SOL) starts from the date of your last payment, September 2014. If you make any payment now, no matter how small, the SOL clock starts all over.
 

sd20forme

LoanSafe Member
Sep 7, 2019
5
0
1
Not sure where you are, but be careful about the lenders motivation if they offer you 'payments'. The Statute of Limitations (SOL) starts from the date of your last payment, September 2014. If you make any payment now, no matter how small, the SOL clock starts all over.
Interesting and good to know! How much time is the SOL? Do they only have a certain amount of time collect?
 
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Tampa9876

Guest
They havent stopped running the interest on that loan. Your principal may be 200k, but with interest it is probably up to 250k by now. If your lender is anything like mine they have no interest in settling for less than the full amount with interest. They will however allow you to cure the past due. Mine offered a 9k down payment and 175 a month payments. This was on a total of 65k second. It's off my report now so no interest in reviving it by making a payment.

Also, get some legal opinions on the SOL of mortgages. They may not be able to sue you for the deficiency, but there is still a lien and they can definitely foreclose on their lien. SOL doesnt make the lien go away.
 
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Chasegame2019

Guest
Interesting and good to know! How much time is the SOL? Do they only have a certain amount of time collect?
Just Google SOL for your state. If your last payment was September 2014 and the SOL for your state is 5 years or less, that means they cannot sue you now to collect the debt.

It does not prevent them from foreclosing though and it does not mean the lien is released from your home.

What it does mean is your loan loses a bit of its value in the secondary market (lenders selling to lenders) and gives you a tad bit of leverage in negotiating. Keywords are 'tad bit' because you have a lot of equity and that's meat on the bone for a lender that wants to foreclose.
 
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Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
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San Diego, California
www.loansreduced.com
Because this topic is coming up again, I'm going to mention the refinance guidelines with this situation whether you're able to get them to agree to settle for a lower amount or you're paying off the full balance.

Conventional rules:
Guidelines: Charge off must be 4+ years old
Settled amount agreed upon by 2nd lien holder is ok as long as they are accepting it to satisfy the lien

FHA - will not qualify

Important Fact: If the 2nd lien holder files a notice of default and initiates foreclosure proceedings you will no longer qualify for a traditional/conventional home loan.

I'm very familiar with these situations, if you have any questions regarding them please also feel free to reach out to me here at 800-779-4547
 
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