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Wednesday, September 12, 2012

PNC Bank: Miscommunication or Mortgage Loan Modification Fraud?

As an attorney who assists borrowers with mortgage relief, loss mitigation, and foreclosure matters, I have dealt with many mortgage loan servicers and lenders, and come across all sorts of outrageous situations.   Unfortunately, PNC may have added itself to the list of mortgage loan servicers behaving badly.   Whether this situation involves intentional fraud and deceit as opposed to shockingly bad communication skills remains to be seen.


To briefly summarize, we obtained a mortgage loan modification from PNC on behalf of one of our clients.  That loan modification offer specifically states, in writing, that accepting the modification (verbal acceptance qualifies, according to PNC) by August 2 and making the first payment by September 1 would cause PNC to “suspend foreclosure”.  The offer warned that failure to comply, however, may result in foreclosure proceedings continuing.   


PNC had been instructed to communicate with us as opposed to our client but of course, ignored that instruction and sent the modification offer directly to our client, who only received it a few days before the August 2 acceptance deadline.   On July 30, we contacted PNC and accepted on behalf of our client.  However, PNC stated that it would not acknowledge our acceptance, despite long knowing that we were involved in the case and having a properly executed limited power of attorney/third party authorization on file.  On July 31, our client called directly and accepted the modification offer.  The acceptance of the modification offer was in reliance on PNC’s specific statements in the offer that the foreclosure would be then be “suspended”.


The payment due by Sept 1 was made in full and on time, by way of certified bank check and certified US Mail, return receipt required and obtained.  However, despite the written agreement, PNC is refusing to suspend the foreclosure process, including this client’s foreclosure hearing which remains scheduled for later this month.  It should be noted that the point of a foreclosure hearing in North Carolina is for the mortgage loan servicer/lender to get final permission to sell the home pursuant to a foreclosure sale.


When confronted with the fact that it is refusing to suspend foreclosure despite making a legally enforceable offer to do so upon acceptance of the modification proposal, PNC stated “it is not our policy to stop foreclosure proceedings until a modification is final.”  This, of course, is in complete contradiction to the written and legally binding offer PNC made to the client and the client accepted.  Making a false promise in order to get an opposing party to agree to something is commonly referred to in the legal field as “fraud in the inducement”.   In other words, one party makes a fraudulent promise in order to deceive the other party into agreeing to something that otherwise might not be agreed to.


So, PNC, are you engaging in fraudulent conduct or is this simply another “miscommunication”?


McGrath & Spielberger, PLLC provides assistance to borrowers in need of mortgage relief services, such as mortgage loan modification, foreclosure negotiation, refinancing, and deed-in-lieu or other negotiated settlement resolutions.