My Non-Performing Second Lien Story – Luzerne County, Pennsylvania

I purchased my first non-performing second-position HELOC in May 2024 through Fixnotes.com.The property is a SFR located in Luzerne County, Pennsylvania.

There are two borrowers — a married couple working as handymen. Considering their trade, it was surprising that they couldn’t keep up with such a small loan.

When I bought the note, the first mortgage was already in foreclosure by PNC Bank, so I initially assumed the process would take care of itself.The first lien payoff was about $30k, my second lien UPB was roughly $3,6k, and the BPO came in around $100k, showing strong equity in the property.

To confirm, I hired someone through Craigslist to take exterior photos — the house looked well maintained, freshly painted, and clearly occupied.

The Twist

In August 2025, just days before the scheduled sheriff’s sale, the borrowers reinstated their first mortgage.The foreclosure auction was canceled, and suddenly I realized that the statute of limitations for my HELOC would expire in November 2025 — leaving me very little time to act.

I started contacting attorneys licensed in Pennsylvania who would handle a small-balance second lien foreclosure.Out of roughly 20 inquiries, only one firm responded — LOGS Legal Group LLP, represented by Samantha Gable (and later by Heather Riloff). After weeks of document review and back-and-forth emails, they agreed to represent my company.

Challenges and Lessons

English is not my first language, and my accent makes phone conversations difficult — people often misunderstand me.That made direct communication with the borrowers or their attorney nearly impossible.I even tried hiring a Service companies, but they required full servicing rights to the note, which made no sense financially for such a small UPB.

In September 2025, I paid the retainer, and the firm started preparing demand letters and (as I think) pre-foreclosure notices.

However, instead of filing for foreclosure — which was the only realistic way to preserve my rights before the November 4, 2025 statute of limitations deadline — Attorney Heather Riloff proposed proceeding as a “debt collection” or “breach of contract” action under the promissory note.

That approach made no sense to me. With the statute deadline just weeks away, a debt collection suit would have given me no leverage at all — no lien enforcement, no control over the property, and no guarantee of recovery. I had to push back firmly and explain that we needed to file a foreclosure complaint immediately, even if the case would later be held in abeyance while waiting for the required notice period (the 30-day response window under Pennsylvania’s Act 6 and Act 91).

Eventually, the firm sent the formal demand letter. But when I received the copy, I was shocked — it listed me personally as the only phone contact for the borrowers.The letter did mention LOGS Legal Group by name, but no phone number or email address for the firm was provided.That’s a serious issue, since English is not my first language, and my accent often makes phone communication difficult. I also live in Hawaii, six hours behind Pennsylvania time, so answering calls during their business hours is nearly impossible.

In other words, the borrowers were instructed to call me — a non-native English speaker in a different time zone — instead of being able to reach my attorneys directly. I immediately emailed the firm expressing my concern about this lack of proper contact information and am now waiting for their response, hopefully by Monday.

This is my first time going through a foreclosure process, but I never expected that seasoned attorneys from a well-known firm could act with such carelessness and lack of attention.I once believed that managing non-performing notes could be handled more passively than, for example, remotely managing my hotel business (my main occupation). Now I see that NPN investing requires full-time attention and active management, and that successful note investing isn’t passive at all — it’s a hands-on business.Unfortunately, for now, I can’t fully dedicate myself to it due to objective circumstances beyond my control, but I’m learning fast and gaining valuable real-world experience.

UPD 11/7/2025

The farce continues — and not in a fun, Broadway-musical kind of way.

Knowing that my attorney’s assistants are, let’s say, “organizationally challenged,” and that the attorney herself prioritizes higher-paying clients, I sent a polite reminder the day before the planned foreclosure filing. You know, just to make sure the train was still on the tracks. They replied promptly, sent me the complaint to sign — I printed it, signed it, scanned it, emailed it back. Smooth sailing, I thought.

Then, right before the end of the workday in Pennsylvania, I get an email bombshell: apparently, attorney’s fees can’t be included in the initial foreclosure complaint. Excuse me, what? You’ve been doing this for decades and remembered that now? Is this how lawyers here work — learn as they go? Yet every signature block proudly declares “20 years representing creditors.” Sure.

Anyway, they managed to e-file the complaint online, probably with seconds to spare before midnight. I imagine someone frantically hitting “Submit” while the clock ticked 11:59:59.

And just when I thought the chaos had peaked — surprise! A new invoice shows up from LOGS billing. Apparently, they “can’t find” my retainer payment. Then they “find it,” but, plot twist, it’s “not in the retainer account.” The left hand has no idea what the right hand is billing for. It’s like watching a legal firm run by goldfish.

So, here I am, still learning note investing — except it’s less “financial education” and more “real-time legal survival comedy.”

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