Loan Modification while under Chapter 13 Bankrupcy

cshdrh

LoanSafe Member
Feb 14, 2014
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Hi, I am new in this forum and have been reading alot of what is on here and think this is probably the place that can help me. My husband and I are currently under Chapter 13 Bankrupcy which will end in July, and we have HSBC as our Mortgage holder. We had short period loan modifications before we entered bankrupcy due to hardship factors, but our mortgage is very high interest with a balloon, which I assume will happen when we are out of the protection of our bankrupcy in July. Does anyone have any advice for me? Do I need to get started now on doing a modification or am I going to have to wait. I know that HSBC fell under the government protection back about 6 years ago on these balloon subprime mortgages, but if anyone has any advice, that would be great!!
 

Evan Bedard

Call 1-800-779-4547
Loan Safe Mortgage
Aug 26, 2007
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San Diego, California
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My husband and I are currently under Chapter 13 Bankrupcy which will end in July, and we have HSBC as our Mortgage holder. We had short period loan modifications before we entered bankrupcy due to hardship factors, but our mortgage is very high interest with a balloon, which I assume will happen when we are out of the protection of our bankrupcy in July. Does anyone have any advice for me? Do I need to get started now on doing a modification or am I going to have to wait. I know that HSBC fell under the government protection back about 6 years ago on these balloon subprime mortgages, but if anyone has any advice, that would be great!
Welcome and thanks for joining the LoanSafe community.

You've definitely come to the right place for mortgage help, but unfortunately your mortgage is held by the worst company we've seen to date. HSBC is by far the most difficult servicer to work with and only offers temporary 6 month to 1 year modifications.. Over the last 6+ years I can maybe recall hearing of one or two members here achieve permanent assistance from HSBC. I have no clue how or why this company has not been shut down or is allowed to service residential mortgages in the U.S.

A loan modification is possible while undergoing a Chapter 13 plan and upon confirmation of the new payment amount, your trustee can make an adjustment to your approved Ch13 plan to reflect the new payment amount.

What is your current interest rate and how many more years do you have left on the loan?
 

Evan Bedard

Call 1-800-779-4547
Loan Safe Mortgage
Aug 26, 2007
18,837
48
48
San Diego, California
www.LoanSafe.org

pennygram

working for consumers
Sep 29, 2010
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First I would suggest your review the BK 13 file to see how much of your debt was put into BK 13 and if HSBC has filed any motions in your case.

Second determine exactly what role HSBC is in - are they the servicer of your loan or are they the owner?

Third once you receive your discharge write HSBC a letter askign them for an accounting of your loan for the last few years - something like please provide to me the payment history from ____ to ___. Please also include any fees and or charges to the loan and the reason for the fees or charges. Also don't forget to include a list of the codes and in plain English explain the description of each code.

Once you get this information you can review it and see where you stand.
 

cshdrh

LoanSafe Member
Feb 14, 2014
10
0
1
Hi, Evan
Thank you for responding. I guess I wrote out a bunch of stuff and it didn't post, so I will do it again. Our loan was actually through Lime Financial and was sold to HSBC. We are currently under the short modification, which I am not sure what the interest rate is, I tried to go online and get into HSBC website and look at my account, however, it is giving me a run around and not letting me in. Our mortgage is $165,000, which our tax bill states est. fair market value is $87,700. We have until 2037 to pay on this mortgage. At the bottom of the loan papers it states Wisconsin Single Family Fannie Mae/Freddie Mac UNIFORM INSTRUMENT. I dont know what that means either. The loan is an ARM with a balloon. We were originally going to refinance, but the market took a dump and we ended up filing bankrupcy and HSBC did give us the modification and kept renewing it without us even calling them. We are now making our payment by phone to their "bankrupcy" department and can you believe they don't charge you a fee to pay over the phone? They would charge $25 if you were a regular customer to pay over the phone. This current loan's interest is 9.99% and to be reviewed every 6 months for adjustment. Before each change, the new interest rate would be the current index plus 6.99% and then round to the nearest 1/8th of a percentage. The first change rate not greater than 12.99% or less than 9.99%, which it never went up, and cannot change more than 1% from the rate we would currently be paying, if we were paying that. 15.990% is the maximum we could pay and not less than 9.990%. Then there is the balloon rider on it also. I would imagine that I should start putting something together to get this modified since I am working with the devil of the industry here. Let me know what you think.....Thank you!
 

cshdrh

LoanSafe Member
Feb 14, 2014
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1
I re-wrote it and so it is posted under this. Sorry, being new, I guess I better get with the game here!!......
 

Evan Bedard

Call 1-800-779-4547
Loan Safe Mortgage
Aug 26, 2007
18,837
48
48
San Diego, California
www.LoanSafe.org
Pennygram has great advice and I would do some research to determine who owns your loan, you can use the links below to determine if it's owned by Fannie Mae or Freddie Mac. If not owned by Fannie/Freddie, check the MERS link below as well. It would give you some leverage if your loan is backed by one of the GSEs, while on the other hand if it's owned by HSBC it will be extremely difficult to qualify for permanent assistance.

Does Fannie Mae Own Your Mortgage? Loan Lookup Tool

https://ww3.freddiemac.com/corporate/

Check MERS here: https://www.mers-servicerid.org/sis/

Also, when reviewing your account for a modification your servicer is going to be taking into account your current mortgage payment vs gross monthly income. Unfortunately, having an ARM, balloon or high interest rate generally does not make a difference. Does your current payment exceed 31 percent of your gross monthly income?
 

cshdrh

LoanSafe Member
Feb 14, 2014
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0
1
Thank you, Pennygram and Evan for giving me this information. I was able to check MERS with the MIN # and sure enough it is owned by HSBC. My "current" house payment is and has been under an HSBC modification since January, 2007, so the current payment does not exceed 31 percent of my gross monthly income. I want to be proactive in getting a "fixed" loan or situation that actually fits the value of our home. We are in a very depressed area due to GM industry leaving our town and home values plummetted. I need to make sure that my home will be mine in the future and not having the mortgage company coming after me when my bankrupcy is over. Also, I called my bk attorney this morning and she is sending me a release to forward to HSBC regarding my account just in case HSBC is not divulging information to me due to not having a release from my attorney. My attorney will not help in any mortgage modification advice or anything like that. I really appreciate your help. I sent a fax to HSBC asking for my "original" loan information as well as my loan modification information. I guess I will have to do this again once I get the release from my attorney since I believe HSBC will probably not respond without this release.
 

cshdrh

LoanSafe Member
Feb 14, 2014
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I received my release from the attorney for bankrupcy, refaxed my request to HSBC about original loan information and also current terms to my modification along with my attorney's release. My attorney will not help in home modifications.
 

Evan Bedard

Call 1-800-779-4547
Loan Safe Mortgage
Aug 26, 2007
18,837
48
48
San Diego, California
www.LoanSafe.org
current terms to my modification along with my attorney's release.
What are the terms of the modification you received back in 2007?
 

cshdrh

LoanSafe Member
Feb 14, 2014
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I cant seem to find that paperwork, so I am currently requesting it along with the attorneys release from HSBC. If I dont hear back in 1 week, I will start calling to follow up.
 

cshdrh

LoanSafe Member
Feb 14, 2014
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0
1
Well, I called HSBC this morning to follow up on my faxed information, since they sent me a letter stating that I needed to call them. So I did and talked to "Pradeep", very hard to understand, but I did find out that my mortgage modification has been modified from 9.9% interest to 5.25% and is supposed to be in effect for 18 months, but I expect due to my bankrupcy it has been frozen. He did clarify that they are NOT putting the difference between the percentages of interest on the back side of my loan. I currently owe $156,475.69. I stated that I would like a appraisal done on my home for re-evaluation and I was given another fax number to fax that request in. Pradeep was not able to handle that request, so I guess I will now do that and see what I get. I don't want to bore anyone, but this may be a good way for people to have hope if I get anywhere with this and I am persistent. I don't shake off easily, so stay tuned.......
 

cshdrh

LoanSafe Member
Feb 14, 2014
10
0
1
I now have received paperwork forwarded from my attorney that was sent by HSBC asking for 2 paycheck stubs so they can re-evaluate the mortgage. It seems that is what we will have to do and see what they do at this point. They have acknowledged that our mortgage is frozen due to the bankrupcy with a temporary modification that they gave us over 6 years ago. I am not sure if we should move forward or wait until our bankrupcy is finished. Does anyone have anything they will share on this? Thankyou!
 

Evan Bedard

Call 1-800-779-4547
Loan Safe Mortgage
Aug 26, 2007
18,837
48
48
San Diego, California
www.LoanSafe.org
I now have received paperwork forwarded from my attorney that was sent by HSBC asking for 2 paycheck stubs so they can re-evaluate the mortgage. It seems that is what we will have to do and see what they do at this point. They have acknowledged that our mortgage is frozen due to the bankrupcy with a temporary modification that they gave us over 6 years ago. I am not sure if we should move forward or wait until our bankrupcy is finished. Does anyone have anything they will share on this?
If it were myself I would go ahead and send the financial information for them to review, you may be on the right path to achieving a permanent modification with HSBC. This would truly be a miracle!!
 

cshdrh

LoanSafe Member
Feb 14, 2014
10
0
1
Hi, Evan
Well I sent in the information before my bankrupcy was finished, and HSBC basically said I had to wait until I was out of bankrupcy. I waited and then they took 60 days to rectify my loan and came back to charge me double the house payment I had been paying for the past 7 years. I absolutely cannot pay that. I am also in a very depressed area where I am under water with loan to value. I contacted a loan modification attorney who deals with HSBC every day and has a 96% success rate. I believe that was my last straw and HSBC agreed to deal with them as a third party so now they say it will take about 6 months to get finished with the modification. I guess HSBC is referred to as "The Bank of China". Seems to set their own rules and gets away with whatever they want. I will say though, that they are now in a lawsuit for slapping homeowner's insurance on people too quickly and not taking it off and they will be ordered to pay back any moneys owed on that pretense for all mortgage holders that have entered into this class action suit. I at least feel more protected moving forward. As soon as the attorney made the bank call, our phone calls from HSBC requesting their money and the stuff coming in the mail all stopped.
 

pennygram

working for consumers
Sep 29, 2010
583
88
28
HSBC is almost impossible to deal with - they usually don't participate in any hamp stuff. HOWEVER....

Like everyone else, they have to follow RESPA. Get on track with knowing the RESPA rules and catch them not following RESPA and sue them... you will get your loan mod... a headache but really very simple.