HSBC/Beneficial not completing foreclosure

[canonshooterhv20]

Received a letter today from Beneficial (now out of business but backed by HSBC), stating:

"This letter is to inform you that Beneficial will not initiate and/or complete foreclosure proceedings on the above referenced property (our home). You will retain ownership of the property.

Beneficial also relinquishes possession of the property. In addition, we will no longer advance any payments for taxes and insurance. You will be solely responsible for the payments of taxes, insurance, and maintenance of this property.

Per the terms of your Loan Agreement, you still have a financial obligation to repay Beneficial for the money they was borrowed. This financial obligation to repay Beneficial or applicable successor remains intact, and Beneficial reserves all right and remedies under the terms of your agreement."

So a basic question. What does this mean? I am finding many different possibilities in my head of what this letter could mean, some good and some bad. Anyone seen something like this or know what my next step should be? We were told foreclosure proceedings had already started, a judgement was ruled against by default, and right before the sheriff's auction they halted the sale, and now weeks later we get this letter. Just not sure what to do next.

[heidi79]

Do a search online, there are alot of banks now not taking possession of properties because they stand to lose so much in foreclosure. It's crazy but true!

Don't leave your home if you don't have to. You will stay now with responsibility for taxes and insurance on the house. Maybe you will shortly recieve correspondance from another lender telling you they are taking over your loan.

DEFINITELY, see an attorney about this and see exactly what your next plan of action is, maybe you get to keep the house with no mortgage! LOL! it's happened before, you never know!

[canonshooterhv20]

Do a search online, there are alot of banks now not taking possession of properties because they stand to lose so much in foreclosure. It's crazy but true!

Don't leave your home if you don't have to. You will stay now with responsibility for taxes and insurance on the house. Maybe you will shortly recieve correspondance from another lender telling you they are taking over your loan.

DEFINITELY, see an attorney about this and see exactly what your next plan of action is, maybe you get to keep the house with no mortgage! LOL! it's happened before, you never know!

This would be nice, but unfortunately once proceedings started and they were moving towards sheriff sale we moved into an apartment. To be honest, unless they dropped everything on it the house wouldn't be worth going back to. I am sure we are going to need to consult a lawyer now, but it's just crazy to see a letter saying here it's yours we don't want it, but by the way you still owe money. Not sure what to make of it.

[heidi79]

They have full departments that make the best decision for their pockets. They consider the cost of the foreclosure, the cost of the upkeep of the vacant house, taxes, insurance, etc. if the math doesn't come out well, they just won't go through with the foreclosure.

Do you want the house? Did you try to do a modification with them?

[Irish Gal]

Received a letter today from Beneficial (now out of business but backed by HSBC), stating:

"This letter is to inform you that Beneficial will not initiate and/or complete foreclosure proceedings on the above referenced property (our home). You will retain ownership of the property.

Beneficial also relinquishes possession of the property. In addition, we will no longer advance any payments for taxes and insurance. You will be solely responsible for the payments of taxes, insurance, and maintenance of this property.

Per the terms of your Loan Agreement, you still have a financial obligation to repay Beneficial for the money they was borrowed. This financial obligation to repay Beneficial or applicable successor remains intact, and Beneficial reserves all right and remedies under the terms of your agreement."

So a basic question. What does this mean? I am finding many different possibilities in my head of what this letter could mean, some good and some bad. Anyone seen something like this or know what my next step should be? We were told foreclosure proceedings had already started, a judgement was ruled against by default, and right before the sheriff's auction they halted the sale, and now weeks later we get this letter. Just not sure what to do next.

Hey canon,

Welcome! There have been articles posted (on this site) on this issue. You may want to do a search here and also Google and read up on the issue. It sounds like the lender "walked" on the property. This is supposedly happening more and more in really hard hit areas where home values have suffered enormous plummets and lenders believe the values may never return to profitable levels. So, they let them go. What state and largest city are you closest to? In the articles I read, the homeowners left the property prematurely thinking the property would foreclose soon. They never checked on whether it actually did foreclose, and then started getting billed by their city for back property taxes, and for the cost of the city to clean/keep up the property. These homeowners were shocked to find later the properties were still in their names because the lenders never foreclosed. They were left holding the bag by the lender. These articles never noted any lenders sending letters to the homeowners with such explanations as you received. So, this sounds like something new and maybe because local/city/federal gov'ts may be getting tougher on lenders dumping properties like this, so they're notifying the homeowners. As the previous poster said, I'd consult with an attorney, see what your options are and see how they may fit with your long-term housing goals. If you definintely don't want to keep the property, you need to find out how to resolve this (legally) in the most favorable manner for yourself. Or you may want to move back in and get some free rent while this resolves itself. You can get a foreclosure timefreame for your state on this site or do a Google search on foreclosure laws in your state. It would be interesting to hear what an attorney says about this type of situation and how a homeowner should proceed in situations such as this. Keep us posted!

[Opus09]

Wow...this is the first I've heard of Beneficial pulling something like this.

My wife and I are currently negotiating a short sale with Beneficial and they have been nothing but consistent in their inconsistency. They are unbelievable.

Definately retain a lawyer and keep us posted.

[HopingtoFind]

The way I am reading it is they decided not to foreclose on the house, they don't want to take ownership of the house.
They will probably try to collect on the debt as any unsecured creditor would, hire an attorney and get a judgement or sell it collections. But they are saying house is yours to keep.

[negativespace]

Bizarre considering Beneficial's track record. If you don't mind me asking, can you provide a rough estimate of the property value (or loss of value)? I'm currently dealing with these very same people and it's exasperating to say the least.

[christy4]

Something to also consider is that if Beneficial relenquishes posession of the property, they would also need to sign off as lienholder on the title. Not doing so would cloud the title and make it near impossible to sell at a later date.

[KFish]

Wow, how odd! Please keep us posted as to what happens!