Your money is really their money…

In a somewhat surprising revelation discovered by one of our clients, PNC Bank decided to take a payment from a savings bank account in the name of the borrower's 15 year old daughter, on which a parent (the borrower) was the custodian. The payment was for a home equity loan - not a traditional amortizing loan.

PNC in its post taking letter to the borrower advised that they took the payment was a right of "set-off" against the delinquency, and taken "in accordance with the rules of your deposit account".

There was no separate letter or notice to the account holder - the 15 year old. Interestingly, the borrower had sought to close the account months earlier and was told she did not have authority to do so.

Take this as an alert that any delinquent or soon to be delinquent borrower should analyze their account placement relative to their lenders. Typically the loan documents do not talk about taking funds from accounts -- but the account contracts may allow "set-off" for other delinquent accounts with that lender.

---------------Thanks for reading…Steve Jackson    561.602.1258 (Direct)

Copyright 2012 by Richard P. Zaretsky, Esq. RPZ99@Florida-Counsel.com Shortsales@Florida-Counsel.com  www.Florida-Counsel.com