PNC Bank has come back on a short sale. They hold the 2nd trust for my client. On this particular sale, the 1st trust will be paid in full. This is the first time that I have been involved in a short sale where a note actually gets paid in full.
PNC's note is for $195K. I have a contract on the property for $650K. PNC will NET over $58K on their note. It is the single best disposition I have seen for a secnd position lender by a wide margin!
Here's the rant. My client has proven hardship. He's a 71 year old man. His sole income is $1822.00 from social security. His current bills total $7400.00/month.
PNC has not done an interior BPO. They have the value locked in at a number ($780K), and the negotiator is telling me that they have a BPO on file. I have repeatedly requested that they do a current INTERIOR as the property is 20 years old with all original equipment in the property (except for the A/C). Zillow values the property at $691K. I have sent that information along. I have even explained that we may have an appraisal issue at the current $650K contract price.
Their position is that my client come to the table with $130,000.00, and take the rest back in a promissory note for the balance. They are offering no reduction at all on his current note. They are actually insisting that the entire note be paid.
I keep trying to refer to the process; proven hardship plus a market value established by a recent interior BPO. The negotiator seems to be preoccupied with the fact that the first trust is being paid in full. I also have explained - with no success - that her position is not based on the facts or the process.
I have one last run at the negotiator on Monday. If she does not agree to do a new BPO to get a clearer understanding of the FMV of the property, I will have to cut a buyer loose who has already been through and approved by underwriting. My client will walk away from the house and let the banks foreclose because he realizes we cannot sell it for $780K when the market value is $650K. He does not have any money he can bring to the table. He will then have to declare bankruptcy.
I am so frustarted as I have not yet dealt with a bank that simply is not following the established process, especially considering that they are going to make much more money if they approve this sale than they will if they foreclose!