PNC Settlements (nearly out of the money)

[ShakenBake]

First, this forum is a great reference tool!

Here's my question:

1st with Wells Fargo with about 455k outstanding.
2nd with PNC, HELOC used to purchase (orig Nat City) with 82k.
House estimate on zillow 460k.

Always been current, always overpaid a little to principal. I expect to have a lot of cash in the bank in the next few months, but I have no interest paying off the negative equity. We will be moving in the next 6-30 months.

So, can I get PNC to settle out now on the 2nd, and what would be reasonable? 25%?

And if I sell the house for 460k, do I owe PNC anything beyond the 5k they would have left over if I live in a non-recourse state?

Thanks!

[Evan Bedard]

Always been current, always overpaid a little to principal. I expect to have a lot of cash in the bank in the next few months, but I have no interest paying off the negative equity. We will be moving in the next 6-30 months.

So, can I get PNC to settle out now on the 2nd, and what would be reasonable? 25%?

And if I sell the house for 460k, do I owe PNC anything beyond the 5k they would have left over if I live in a non-recourse state?

Welcome and thanks for joining the forum.

If you are able to settle your 2nd mortgage prior to selling the home you will not be held liable to pay PNC anything after the sale is complete. Since the HELOC is complete underwater PNC is in no position to pursue foreclosure on that account and would end up losing a significant amount of money doing so. Being in a non-recourse state and both mortgages are purchase money loans you cannot be held liable for a deficiency judgement. You will definitely want to check out the following thread, it has some great strategies and tips to successfully settle your HELOC.

Strategy for Settling Your 2nd

[ShakenBake]

Welcome and thanks for joining the forum.

If you are able to settle your 2nd mortgage prior to selling the home you will not be held liable to pay PNC anything after the sale is complete. Since the HELOC is complete underwater PNC is in no position to pursue foreclosure on that account and would end up losing a significant amount of money doing so. Being in a non-recourse state and both mortgages are purchase money loans you cannot be held liable for a deficiency judgement. You will definitely want to check out the following thread, it has some great strategies and tips to successfully settle your HELOC.

Strategy for Settling Your 2nd

Thanks, I will check that out. If PNC settles, would that harm my credit rating at all?

[Rillion]

Thanks, I will check that out. If PNC settles, would that harm my credit rating at all?

Most likely, yes. It usually gets reported as "paid in full for less then entire amount" or something along those lines which is a negative item on your credit report.

[Shifty]

You would be lucky to see PNC make any move until you are a good year and a half with no payment. I have not paid for 1.5 years and am still waiting.

[Evan Bedard]

Thanks, I will check that out. If PNC settles, would that harm my credit rating at all?

Yes I agree, this will have an affect on your credit rating once the settlement is complete.

[blissy]

PNC rep told me yesterday the minimum they would take to settle our 200K underwater heloc would be 10% or $20K. First we need to be approved. He asked me to send tax returns, bank statements and pay stubs and he would send it up for approval. I told him we don't have any of those as our son moved in with us and is paying our first mortgage and we have no income. He submitted that info with our hardship letter for approval.
I asked today how long would approval take and he said about 3 weeks but could take up to 6 weeks.
What do they do in the approval process? Could they come back and want more to settle this?

[Ready2Run]

I answered a bit more in the other thread but thought I'd answer two things here.

"What do they do in the approval process?" They are trying to get as much info from you as possible. You can consider it a "discover" as in pre trial discovery.... basically seeing what monies they can extract from you. If you don't give then anything they will look at public records, your credit reports and any / all information they got from you in the past. With this they will figure out how much money they *think* you could get. I even heard one banker tell someone that they could get X dollars since their credit report showed this much "available" credit. I believe that statement was skating a fine line of what a collector can legally say but that is how they think.

"Could they come back and want more to settle this?" Absolutely! Especially if you give them financials and they *think* they can get more from you. Got a 401k or retirement, well even thought the banksters aren't legally entitled to that, they sure think they are and will most likely want and ask for it. This is the reason NOT to give financials. But your spending habits shown on your credit report can be problematic too.

Hope this helps!

[Evan Bedard]

Excellent information Ready2Run! As always thanks so much for taking the time to help out others in the community!:-)