HSBC - Dealing with the Beast

[OnAMission]

Started following the strategy for 2^nd’s back in April. Last payment was 3/26. Located in Louisiana.
First with BOA – 240,000.
Heloc with HSBC – 60,000.
Value is somewhere around 260K.
Went through a relatively easy modification with BOA a couple of years ago. No problem there. HSBC on the other hand is a beast. Was paying interest only along with whatever extra I could but after 5 years am right where I started balance wise. Decided to get off the hamster wheel, quit taking their calls, and see where we end up.

Today I received the following from HSBC;
“Dear XXXXX:
According to our records, you have received a pre-foreclosure letter as required under the terms of your Note and Mortgage/Deed of Trust.
Without an acceptable payment arrangement, we have the right to accelerate your balance.Yada, yada, yada. Please contact us immediately.”

Have a few questions for anyone with experience dealing with the beast.

1) Though I don’t remember seeing any type of pre-foreclosure letter, am I assuming correctly that this is simply form letter 100 of 1000?
2) I thought I read somewhere on this site that it normally it take about 180 days for them to write off the balance and either send some type of settlement offer or turn it over to a third party. Is this correct?
3) Trying to get this done before the end of the year so I may be able to take advantage of the tax forgiveness. What kind of time frame are others experiencing from start to finish of the strategy and is there any other action I can take to accelerate the process?

Thank you all for any input.

[Cat Damiano]

The success stories along with timeframes are being posted in the following thread, although I am not sure of any HSBC ones;

Success Stories in Settling 2nds

[Rillion]

Started following the strategy for 2^nd’s back in April. Last payment was 3/26. Located in Louisiana.
First with BOA – 240,000.
Heloc with HSBC – 60,000.
Value is somewhere around 260K.
Went through a relatively easy modification with BOA a couple of years ago. No problem there. HSBC on the other hand is a beast. Was paying interest only along with whatever extra I could but after 5 years am right where I started balance wise. Decided to get off the hamster wheel, quit taking their calls, and see where we end up.

Today I received the following from HSBC;
“Dear XXXXX:
According to our records, you have received a pre-foreclosure letter as required under the terms of your Note and Mortgage/Deed of Trust.
Without an acceptable payment arrangement, we have the right to accelerate your balance.Yada, yada, yada. Please contact us immediately.”

Have a few questions for anyone with experience dealing with the beast.

1) Though I don’t remember seeing any type of pre-foreclosure letter, am I assuming correctly that this is simply form letter 100 of 1000?
2) I thought I read somewhere on this site that it normally it take about 180 days for them to write off the balance and either send some type of settlement offer or turn it over to a third party. Is this correct?
3) Trying to get this done before the end of the year so I may be able to take advantage of the tax forgiveness. What kind of time frame are others experiencing from start to finish of the strategy and is there any other action I can take to accelerate the process?

Thank you all for any input.

While I am not dealing with HSBC, that letter is similar to one I got from my servicer. It is a basic form letter that is trying to scare you into making a payment. Most successful settlements are taking well over six months. 180 days is when they write it off, some will make a settlement offer at that time but many are not.

Most likely the only thing you can do to accelerate the process is offer a high percentage settlement. While I hope the tax forgiveness law is extended, I am not going to let it dictate my strategy. I'd rather wait for the best settlement I can get, for example if I get a 5 percent; settlement but pay have to pay taxes, that is still less out of my pocket then settling for 50 percent.

[OnAMission]

While I am not dealing with HSBC, that letter is similar to one I got from my servicer. It is a basic form letter that is trying to scare you into making a payment. Most successful settlements are taking well over six months. 180 days is when they write it off, some will make a settlement offer at that time but many are not.

Most likely the only thing you can do to accelerate the process is offer a high percentage settlement. While I hope the tax forgiveness law is extended, I am not going to let it dictate my strategy. I'd rather wait for the best settlement I can get, for example if I get a 5 percent; settlement but pay have to pay taxes, that is still less out of my pocket then settling for 50 percent.

Rillion,

Thank you for the reply. Agree with your thought about the taxes and it does seem logical with the present state of the market they would extend the law. Would love to have my cake and eat it too but would pay the taxes on a 5 percent settlement in a heartbeat.

[Pennybond]

Hello OnAMission,

Looks like we are in the same spot. There are not too many on here dealing with HSBC. Here is a like to the thread I started: Stopped making payments on Second with HFC. HFC was purchased by HSBC about 3 years ago. I just recieved the same letter last week and I am looking at it in the same way as Rillion suggests. Just a scare tactic. My last payment was Feb of this year and I just noticed that they finally posted to my credit report file last week as well (past due 60 days.) I think we just have to wait. I did block the number they call from so I have not spoken to anyone or heard the phone ring for a couple of months. Keep us updated!

[OnAMission]

Pennybond,

Thanks for the reply. This month will be my third without a payment and I have noticed the calls are slowing a bit. During months one and two they called throughout the day and every Saturday and Sunday at 8:00am sharp. Now we get a few during the week and maybe one on the weekend. I did try to go into my online profile and change my number to Google voice but they have that area locked out.
Good luck to you and I will keep an eye on your thread for updates.

OAM

[Pennybond]

OAM,

I had the same pattern. I actually have Comcast so I was able to go through and block the number HFC was calling from. The only drawback I see to this strategy is you can only block up to 10 numbers so if they do change the number they call from it would ring through. But as a rule I generally do not answer calls from 800, 866 numbers. If anyone has anything important to say they can leave a message. Good luck to you, too!

[OnAMission]

Well, I guess today marks phase two of the mission. As I have not answered a call from HSBC in 3 months, they have now hired a third party to try and get something worked out with me. I took the call not knowing who it was and I must say I was surprised by the professionalism and courteousness of the person I spoke to.

They are basically offering four remedies;
1) Short sale the house (not an option).
2) Pay what is due today and bring the account up to date(yeah I will get right on that).
3) Pay the full amount of the loan (almost wet myself on that suggestion).
4) Complete a hardship letter along with various other financials and include a settlement offer with the package.

I told them I may be interested in number 4 but would have to think about it. They would need the normal financials, i.e. 2 years tax returns, 3 months bank statements, a financial worksheet showing my income/liabilities, and the offer.

I guess my question is; What is the downside of putting together the financials and giving them an offer of 5 percent. I was surprised by the fact that the person I spoke to had no hesitation in saying they would present the offer to HSBC. They freely admitted that HSBC had been accepting offers to close out the loans and that it normally took anywhere from 2 weeks to 2 months to get the entire thing done.

Would appreciate any feedback.

OAM

[Pennybond]

OAM

IMO I would just send in the 5% offer without financials. Remember giving financials is giving away information that they don't need to make you a settlement offer. Your loan is underwater and if they want it off of their books they will make you an offer regardless of your financials as the collateral (value of your house) that backstheir interest is mostly gone in your case. You have time and the leverage at this point. I read the HSBC earnings conference call for 1st quarter this year and they want out of their North American Portfolio more quickly than they originally indicated. This portfolio is still about $50 billion (worth of mortgage loans) and they would much rather redeploy the capital set aside to support this portfolio in assets that are actually earning a return. That's my 2 cents anyway. Let us know what you decide.

[Pennybond]

This may be the third party you speak of...HSBC shifting mortgage ops to N.J. company - Buffalo - Business First

[OnAMission]

Pennybond,

Thanks for the input. After thinking about it and discussing it with my wife last night I agree with your suggestion. I am going to put together a simple hardship and offer letter to submit. I am supposed to have a follow up conversation with the third party late this week to tell them what I have decided. Planning on telling them I am faxing hardship/offer and ask that they present it to HSBC. Doubt that they will refuse to present it.

By the way, the third party was different from the one you mentioned. Not really a servicer I don't believe, just someone to use when they (HSBC) are having no success with phone contact.


OAM

[Pennybond]

OAM

Let me know how it goes. Good Luck.

Pennybond

[OnAMission]

Well they will not accept the settlement offer without the financials so I guess this means we move on to the next step whatever that may be.

Can anyone give me a hint as to what that next step may be?

Thanks - OAM

[Pennybond]

OAM,

If I were you I would wait. Think of it as a way to trick you into sending in you financial information. I think that is the advice you will get from most here?! This can **** at times.

Penny

[OnAMission]

Penny,

After searching thru various posts I am mailing a letter (to their corporate office) today which includes an explanation of my hardship, a settlement offer that I am asking them to present to HSBC, and a request to refrain from contacting me by phone. According to the post "Things Collection Agencies Won't Say" apparently once they receive the letter they are obligated to only contact me in writing. I know this probably won't do squat but if push comes to shove, I want to have something in my quiver that shows I at least tried. I will let you know the response I receive if any.

[Pennybond]

That seems like a sensible thing to do. The best settlements seem to be coming from further down the road, (from a timeline perspective) than where you and I are currently in this process. Like you I have also have the "at least tried" arrow in my quiver. I tried to get them to permanently modify the loan. I would have continued paying the modified rate even though this loan is underwater. This seemed reasonable to me. HSBC went as far as to tell me they would send back any payments that were for less than their ridiculous non modified payment. So now they get nothin'! Thanks for keeping the updates coming. I will do the same.


Penny

[troubleinriverside]

I stopped paying my $250K HSBC 2nd over 2 years ago after discharging it through Ch-7 Bankruptcy. I have not heard a peep in about 2 years, and they charged it off right after my BK discharge. I plan to settle someday, but its going to be a long time. I believe what the other poster stated. HSBC got burned bad in the US and wants out.

[OnAMission]

I think, though I am just basing it on other posts in the forum, that my letter has now generated some action. I received a call from a lady this afternoon telling me she has been asked to take interior pictures. I have read several posts where this is a normal step in the bank's review of your offer and am hoping this is correct. It is scheduled for Monday at 11:00 am and hopefully I will be able to get a little info out of the person.

[Pennybond]

OAM, I am be curious how this turns out for you. I may send in my own offer as well since we are at about the same point in the process. However, Tom Eason and others on the board suggest waiting until the lender sends an offer. Every situation is different as well as everyone's patience/stress level. On another note, I just recieved a call from HFC about a half hour ago at work. First time I have spoken with them since April. They wanted to know if I could pay the past due and I said no. They asked how much I could pay today and I said I did not know. They said they could help work out a solution if I could wait a moment. I told them I tried to work out a solution with them back in April, that I could continue to pay the modified payment I was making, however HFC told me they would not accept the payment if I made it for the old amount. Then I was silent and realized no one was there anymore. Was this a call just to find me?? I think next time I speak with them I will ask which department they are from and if they are not from the recovery department I will just say I will speak with them when they are ready to discuss a settlement. Let me know how you viewing goes.
Penny

[OnAMission]

PB....the lady that did the photos was more than willing to share everything she knew about the process and said over the past year she has done "a ton" of interior inspections. Apparently there is a site that lenders post requests for interior photos and a write up about the home. Local realtors accept the assignments to fill in their income when housing sales are slow. She was more than willing to show me the request itself so I could verify it was from HSBC and also had with her the original MLS listing showing the sale of my home.

She walked through each room snapping pics and then asked me if there was any damages I wanted her to note on the report. I took her through several things that would have to be corrected before the home was to be put up for sale and she took pictures of those. She then proceeded to tell me that from the comps she has seen in the area, should HSBC decided to accelerate, they would not get a dime.

Funnier part is right as she was pulling out of my driveway the mailman came by. In the mail was a letter from HSBC thanking me for my recent letter on my account and letting me know they were reviewing and would be in touch shortly. I am assuming that is the letter I sent the CA a couple of weeks ago stating the hardship and offer.

I'll let you know what I get next but it sounds to me that your original thought of HSBC just wanting out maybe accelerating their willingness for settlements. My assumption is I will get a letter with a counter offer at a much higher amount than I offered. I'll keep you posted.

OAM

[ccsint]

PB....the lady that did the photos was more than willing to share everything she knew about the process and said over the past year she has done "a ton" of interior inspections. Apparently there is a site that lenders post requests for interior photos and a write up about the home. Local realtors accept the assignments to fill in their income when housing sales are slow. She was more than willing to show me the request itself so I could verify it was from HSBC and also had with her the original MLS listing showing the sale of my home.

She walked through each room snapping pics and then asked me if there was any damages I wanted her to note on the report. I took her through several things that would have to be corrected before the home was to be put up for sale and she took pictures of those. She then proceeded to tell me that from the comps she has seen in the area, should HSBC decided to accelerate, they would not get a dime.

Funnier part is right as she was pulling out of my driveway the mailman came by. In the mail was a letter from HSBC thanking me for my recent letter on my account and letting me know they were reviewing and would be in touch shortly. I am assuming that is the letter I sent the CA a couple of weeks ago stating the hardship and offer.

I'll let you know what I get next but it sounds to me that your original thought of HSBC just wanting out maybe accelerating their willingness for settlements. My assumption is I will get a letter with a counter offer at a much higher amount than I offered. I'll keep you posted.

OAM

Unless you second mortgage is only partially underwater, and you want to show that the quality of your home is average or poor, I can't see any benefit to allowing them to take pictures of your home. Especially if you take care of it.

[Pennybond]

OAM, Thanks for the update! It sounds promising and I'm feeling hopeful this is going in the right direction for you. Did you end up giving them your HSBC finacials....I'm just curious.

T

[OnAMission]

OAM, Thanks for the update! It sounds promising and I'm feeling hopeful this is going in the right direction for you. Did you end up giving them your HSBC finacials....I'm just curious.

T

PB...no I didn't send them anything except a brief explanation of the hardship and my offer to settle.

[OnAMission]

Unless you second mortgage is only partially underwater, and you want to show that the quality of your home is average or poor, I can't see any benefit to allowing them to take pictures of your home. Especially if you take care of it.

ccsint....I believe the second is completely underwater so I want to move the settlement along as quickly as I can. We take great care of the home but like any other home there is always something that needs attention. I made sure while she was there to point each of those out to her no matter how insignificant.

I am really not to concerned as I believe if they did a full appraisal, based on the comps I have seen, my first would even be about 10K short of having any equity. Just my opinion.

[Pennybond]

PB...no I didn't send them anything except a brief explanation of the hardship and my offer to settle.

OAM, Good to know, thanks!

[OnAMission]

Received another letter from HSBC yesterday telling me who my settlement contact is and informing me they are reveiwing my offer. States they must have internal photos and valuation done before they can proceed. As this was done Monday, hopefully they will be getting back to me in the next couple of weeks with either an acceptance letter or counter proposal. Letter says I can call if I have any questions but I am doing nothing until I receive their response. Either way it seems like it is moving along and thats fine with me.

Will post their response as soon as I receive it.

OAM

[Pennybond]

OAM, It does seem that things are proceeding as they should. I would do the as you in not contacting them.

I have not heard further from HSBC since thier call on Monday. The robo callers still call at home but the call I recieved on Monday was at work. I still find it strange that they hung up on me while explaining my situation....not sure what that was all about.

I was wondering if you could post the address that you sent your hardship and settlement offer to. I cannot remember if you sent it directly or through a collection agency. If not then the next time I actually talk to someone there I will ask for an address or fax number.

Thanks and good luck!

PB

[OnAMission]

PB,

Sent it directly to the CA's headquarters listed on their letterhead. Mine was a CA out of Everett, WA. Funny part was they told me HSBC would not even look at it without financials. Uh, wrong.

OAM

[pelicanz]

Hi everyone ... I'm anxious to see how all this goes for you all ... I've just started the process of non-payment with HSBC myself. They've done the temp modification for a couple years now - start over every 6 months and payment goes up and down, although our expenses and income have not changed. we've been able to afford the mod payments, but now they say we make too much money to qualify for a mod - they changed the income requirements for mods. They said full payments or a short sale are my only options. I sent the usual financials last month, as I've always done, for the mod ... but this if the first time we were denied.

We are current on our first with Wells Fargo - we owe $116,000 and have an in house 2% modification - and only 9 years left on both of our mortgages. We owe GMAC $7,000 (Wells Fargo had them assume the late payments when we got the modification - only $50 per month). We owe HSBC $35,000 on our second. Our tax assessment value is $105,000 - but Zillow puts us at $132,000. We paid $185,000 but put quite a bit down. Comps in our area are listed for around $120k - and selling for about $118k.

Staying in the home for now is our only option. We are only $200 short a month from being able to afford the second - but HSBC won't work with us. So for now, I'm putting the payment we could afford into a savings account. We both have jobs, but work for the state and have not seen increases for 5 years - and our expenses (fuel, food, daycare, insurance, etc.) have gone up 20%. We've managed to stay afloat with our now non-existant savings account - but are now at the point where we have to use credit cards just to make ends meet because of this 14.99% second mortgage with HSBC.

So - I'm following the "how to settle a second" plan, hoping that they don't decide to foreclose on us ... or at least that i will have some money saved to try and make this work... If they do set a court date for FC ... what are my options? We don't qualify for BK mortgage relief because of our income. I hate that I have to ruin our descent credit history over this, but we just can't afford it right now.

Keep me posted and I welcome any ideas....

[troubleinriverside]

Hi everyone ... I'm anxious to see how all this goes for you all ... I've just started the process of non-payment with HSBC myself. They've done the temp modification for a couple years now - start over every 6 months and payment goes up and down, although our expenses and income have not changed. we've been able to afford the mod payments, but now they say we make too much money to qualify for a mod - they changed the income requirements for mods. They said full payments or a short sale are my only options. I sent the usual financials last month, as I've always done, for the mod ... but this if the first time we were denied.

We are current on our first with Wells Fargo - we owe $116,000 and have an in house 2% modification - and only 9 years left on both of our mortgages. We owe GMAC $7,000 (Wells Fargo had them assume the late payments when we got the modification - only $50 per month). We owe HSBC $35,000 on our second. Our tax assessment value is $105,000 - but Zillow puts us at $132,000. We paid $185,000 but put quite a bit down. Comps in our area are listed for around $120k - and selling for about $118k.

Staying in the home for now is our only option. We are only $200 short a month from being able to afford the second - but HSBC won't work with us. So for now, I'm putting the payment we could afford into a savings account. We both have jobs, but work for the state and have not seen increases for 5 years - and our expenses (fuel, food, daycare, insurance, etc.) have gone up 20%. We've managed to stay afloat with our now non-existant savings account - but are now at the point where we have to use credit cards just to make ends meet because of this 14.99% second mortgage with HSBC.

So - I'm following the "how to settle a second" plan, hoping that they don't decide to foreclose on us ... or at least that i will have some money saved to try and make this work... If they do set a court date for FC ... what are my options? We don't qualify for BK mortgage relief because of our income. I hate that I have to ruin our descent credit history over this, but we just can't afford it right now.

Keep me posted and I welcome any ideas....

That sounds like a very sound plan. HSBC is notorious for not offering permenant mods. your nearly upside down so they will not foreclose on your 2nd. Join the rest of us. to hell with them. I stopped paying my HSBC $245K 2nd over 2 years ago and have not heard a peep. I will have to settle some day, but that will be way into the future. Best of luck to you

[OnAMission]

pelicanz,

Agree with troubleinriverside on your situation. HSBC will not foreclose as by the time they pay all of the associated costs they will end up with zero. The phone calls are annoying to say the least but if you stick to your plan it will work. They called everyday, multiple times for the first couple of months, then turned it over to a third party CA to try and get me to pay. The CA told me my only option was to pay what I was behind, short sell the house, or face foreclosure. When I asked about a settlement they gave me a laundry list of crap they "HAD" to have before HSBC would even look at a settlement. Wrong! I sent an offer letter directly to their headquarters briefly explaning my hardship and included a settlement offer. Asked them to quit contacting me by phone and present the settlement.

Lo and behold a couple of weeks later HSBC arranged for a local realtor to do an inside inspection so they could consider my offer. So much for not considering it without the laundry list. If you do a little searching you will find that all HSBC wants is out of the US housing market. There are several stories on this forum of successful settlements in the area of 7-15 percent.

Stick to your guns and be patience. You can win this fight. Good luck and I will keep posting my progress.

OAM

[pelicanz]

Thanks everyone - what is HSBC looking for with an inside inspection? We've fixed up our house quite nicely (with the HSBC money ...) finished the basement, put on a new roof ... added value to us, but no real market value added. If our house looks too nice, will that change their minds? We do need a new HVAC unit (ours is original and needed numerous repairs ... won't last much longer) ....

Has anyone refused the inspection and still got the settlement?

[OnAMission]

pelicanz,

We had done quite a bit of remodeling over the years, ie new kitchen, additions and such. Never said a word about it to the inspector. She came in and took a picture of every room along with a front and back pic. I was also sure she got pictures of areas that needed attention. Nothing major but they would still need to be worked on before any sale would be possible. What the realtor was basing her comps off of was the original MLS which had 600 less square feet listed than actual. I never bothered to point it out to her and as she didn't measure the rooms I am assuming she will base her value off original.

I think the general opinion is to just ignore them until a settlement is offered. I took a bit more of a proactive approach as I stated above. It has been about two weeks since the inspection and I haven't heard anything as of yet. Will post when I receive their response.

OAM

[pelicanz]

Thanks for the advice everyone - what kinds of letters/notices did you receive from HSBC along the way? Is there any letter/notice that I should respond to? Any letter/notice that would mean they are seriously considering foreclosure and I should take action?

[OnAMission]

pelicanz,

I have received two letters from HSBC. The first one talked about the fact I was behind and unless a payment was received they had the right to accelerate the loan. Ignored this one and several days later started getting calls from a collection agency trying to collect on their behalf. As you can see from previous posts, this is when I sent the CA my hardship and offer letter asking them to present it to HSBC and only contact me in writing. Shortly after submitting the letter I received my second letter from HSBC informing me they were reviewing my offer and giving me the name of my internal contact at HSBC. Since then, nothing.

Based on the facts of your situation I very much doubt they would bother to try and foreclose. If they do, by the time they pay all the associated loans and costs, they would get zero. About the only thing I would respond to is a notice of a lawsuit or a settlement offer from them, countering at a lower amount. Continued good luck.

OAM

[Pennybond]

Hey OAM,

Anything new to report?? Any offers after the inspection?

Penny

[OnAMission]

Penny,

Nothing since the last letter with the contact info and telling me they are reviewing. Keep expecting a package at my doorstep but nothing yet. I would imagine they have quite a few of these they are working on. Thought about reaching out to the contact to get a status but decided patience is probably the better approach.

How about your situation, anything new?

OAM

[Pennybond]

OAM,

Not a thing. Calls have slowed, I think. I cannot see blocked calls on my caller ID however there have been a few calls, about every few days, from other numbers at HSBC. No one ever leaves a message so I'm sure calling the numbers would not be fruitful. I am now 149 days past due and I still think the loan will be charged off at 180 days. So I am expecting some activity before that date so probably next month. I have saved my payments since I stopped paying and should have 6% of the loan balance saved up for negotiating if the opportunity arises next month. That is about it for now.


Penny