Dewey National City System

I currently have two loans with National City (now PNC) my 1st mortgage is $600k and the 2nd is $150k. 

I am technically in foreclosure with the first but working with the loan modification department on a workout package. 

My 2nd is due to charge off at the end of the month.  I have asked them repeatedly to work with me on a modification but they have only come back with a reduced payment for two years. 

I would like to stay in my home but given that I am down $300k don’t feel the 2nd is reasonable and am waiting on the first to determine what I should do next. 

Should I let them charge off the 2nd mortgage? 

Please advise?

Dewey

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Hi Dewey,

That of course is a decision that only you can make.  I’ll freely give you my thoughts which are worth about as much as they cost. 

I start with the assumption that there isn’t enough money to pay the contractual payments.  The question is: will the financial situation improve dramatically, stay about the same, or worsen?

If my situation was going to improve dramatically then the look of my credit report and credit score might be of highest importance.  The second mortgage could potentially re-age and delete the derogatory past history, starting again with what would be on-time payments from this point forward.

If my situation was going to stay the same then I might be inclined to pursue a loan mod on the first mortgage and then, after completing the trial period and after accepting a permanent mod on the first, I might file a Chapter 13 and strip off the second mortgage entirely.

If my situation was going to worsen then I might be inclined to short sell and try for a full settlement on both loans and save some funds to get back ahead of the game.  In this market, for some it might be best to rent a nice home and avoid all of the aggravation.

That’s the simplified version of what I might be inclined to do in such a situation.  Again, only you can make a decision on what is best given your situation.

Thanks for the questions and hope this helps.

Paul

This author is not an attorney and this information should not be considered legal advice.  Please consult an attorney for legal advice.