If I am going to lose a short sale to foreclosure in Sacramento, odds are that short sale is probably with PNC Bank. I'll tell you why. Out of my last bunch of short sales with PNC, only one of them closed. Those are really lousy odds. Whereas my odds with a Bank of America short sale are much higher. I'm not 100% sure because I haven't checked, but my off-the-head guess would be I lose maybe 1 out of every 25 Bank of America short sales. My success ratio at getting to the approval stage with my Sacramento short sales is pretty high.
But what's with PNC? I know that PNC will do a short sale because I have done them. I'm not even talking about the original National City loans. Albeit, every single one of those PNC short sales was a battle and felt like going to war against the Taliban. Not that I have any personal experience with the Taliban, mind you. But I have found that PNC often demands a seller contribution, and that contribution is often astronomical as compared to requests from other banks.
A potential seller with a Campus Commons home called me last night to talk about doing a short sale. He has a first mortgage with PNC. It's not owner occupied. The loan has been refinanced, and it's a cash-out refi. His hardship letter will probably not reveal any severe fall-backs. He's pretty much hosed. I'm not saying it's impossible for him to do a short sale, but if he tries, he will probably pay for the privilege. Because it's PNC.
The last short sale PNC rejected was yesterday, a situation involving 2 purchase money loans with PNC, a first mortgage and a second mortgage. The seller documented her financial hardship. The first mortgage offered $3,000 to the second. The second demanded $8,000. The first would not let the seller -- nor anyone else -- contribute to the second mortgage. The lawyers pointed to California Code of Civil Procedure (C.C.P.) 580b, that should the first mortgagee foreclose, that lender would not be entitled to a deficiency judgment because both liens are purchase money loans.
Moreover, the lawyers argued, the California Supreme Court has ruled that when a senior and a junior loan are held by the same institution, the junior lender cannot consider themselves "sold out." As such, the junior lender is barred from recovery. Because both the senior lien holder and the junior lien holder are PNC Mortgage, you can't "sell out" a client who is also PNC.
But that's exactly what PNC did. PNC pretty much told the lawyers (excuse my language): Screw you and the horse you road in on. The negotiators at PNC are guerillas, abrupt and not very polite. Where does PNC hire these employees from? The World Wrestling Federation?
Photo: Big Stock Photo
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