HSBC Bank Policy Designed to Destroy Homeowners who want to Avoid Foreclosure.
I currently have a client who has two liens on his home. The first lien is with HSBC and it’s a conv. fixed rate 30 year mortgage. The second lien is with US Bank and it’s a Home Equity Line of Credit. In order to avoid foreclosure, my client originally approached both lenders and requested a Deed-in-Lieu however, the lenders advised him to complete a short sale. He finds me, we list the home for sale, and get an offer that pays off the first lien in full, as per the HSBC pay off letter and pays the second lien nearly 60% of what they are owed. This past weekend, we received notice that HSBC has decided to set a foreclosure sale date of 10/24/2013. We notified US Bank of the pending HSBC foreclosure and they have opened an Expedited / Assist request in order to escalate our offer through their system for a quick decision on the short sale. We have contacted HSBC to notify them of this development with US Bank and requested HSBC to postpone the foreclosure 45 days in order to give US Bank enough time to complete their process. As of right now, HSBC is refusing to postpone the foreclosure any length of time.
The baffling part of this issue is that it appears, by HSBCs actions, they would rather incur the cost of foreclosure, attorney fees, court cost, preservation cost, disposition cost and REO cost in general in order to purposely avoid the short sale and avoid getting a pay off in full. So, my question is, why would a bank do this? Do the bank’s executives know this is how their short sale / foreclosure / loss mitigation departments are being run? Do the bank’s executives know that they have policies in place that hurt themselves, hurt the homeowners, hurt the local communities, creates a situation where no one wins?
I suspect that if an Executive at HSBC saw my clients case, they would step in and fix this. I suspect that if an HSBC investor saw what was going on here, they would step in and do something. In fact, I suspect that if anyone at HSBC would stop, look at this situation, evaluate their policy and see how this doesn’t make any sense what so ever, they would step in and help us but, so far….no help at all.
In order to bring national attention to this issue, I am going to use my network to its fullest capability. I am going to list the names and dates of the people I spoke with at HSBC in hopes that someone…anyone who can do anything….even if it’s nothing more than some advice, will step in and help.
A list of HSBC employees who haven’t been able to help us or haven’t been willing to help us….
10/8/2013 @ 8:11 am cst called into 1-855-698-7627, Got a call from Mrs. Mantra who was calling me on behalf of Mrs. Danielle Paschale. I was transferred to Sandra Scott who transferred me to supervisor Dania. Call ended with no resolution other than I needed to talk with Foreclosure.
10/7/2013 @ 4:06pm cst I called HSBC 1-800-395-3489 and spoke with Sandy, who said I needed to talk with my Single Point of Contact Danielle Paschale. Danielle wasn’t available so I was transferred to Chris in Modifications. Chris said I needed to speak with Danielle Paschale or someone in HSBC’s customer relations department. Transferred me to customer service who gave me Danielle’s number and said I need to call her.
So, the end result, no one was able to give me an answer, no one took accountability for the file and in fact, I am back to where I started, with a call into Danielle Paschale who is likely going to have Mrs. Mantra call me to tell me she can’t help me so, who can? Better yet, who will?
Comments
FORECLOSURE HAS BEEN POSTONED! Amazingly enough, it has been postponed and here is how it happened. I got our US Bank Relationship Manager to write a email to HSBC requesting more time for US Bank to process the short sale on their end. I forwarded that to our Executive Team member, who told me on the phone that the email was unacceptable however, she would forward to her Manager for consideration. Well, it was considered and I just got off the phone with the foreclosure attorney telling me that the foreclosure has been postponed and no new sale date has been set.
Now, the problem is going to be US Bank. How in the world do we get them to move this file forward and get us an actual approval letter? That may just be a matter of time.
Well, here is the update. HSBC has refused...absolutely refused to postpone the foreclosure even though they are going to get a full pay off on my Estimated HUD-1 for the short sale. The foreclosure is scheduled for 10/24/2013 so, unless something amazing happens, we aren't holding our breath. The biggest problem seems to be the junior lien holder US Bank. They are suffering a 5-6 week back log on scanning documents into their system. You see, HSBC has agreed to postpone the foreclosure if US Bank will issue a short sale approval letter but, because of the US Bank imaging department back log of 5 weeks, US Bank still hasn't uploaded my 3rd party LOA that I sent them at the end of August. We have spoken to at least 10 people at US Bank, from our Relationship Manager to the Foreclosure Department to the Default Resolution Department case # 00620393 and no one has been able to get my 3rd party LOA imaged, let along move the file to review. Now, the irony is, because US Bank is so back logged and because we are short selling, if this asset goes to foreclosure on the 24th, it's highly likely that at the auction, the home will be sold considerably less that what is owed and US Bank will get nothing. You see, on my estimated HUD-1, with the offer we have in hand, US bank would recover over 50+% .....even though they are in the 2nd position. Just so you know, that equates to over $50k. So, the lesson to junior lien holders is, if you would put more people in your loss mitigation departments / short sale departments, you may not loose as much money because primary lien holders wouldn't foreclose you before you had a chance to review the short sale request. Oh...wait, who really cares how much the bank looses because, THE TAX PAYER WILL FOOT THE DAMN BILL! THAT'S RIGHT, LETS STAND IN LINE FOR OUR GOVERNMENT HANDOUT...TARP 2.0, SO, WHO CARES!!!!! AAAGHH!!!
Hey Ed Smith, We are non-judicial but, it's an idea that I will pass on. Thanks.
Jesse:
I do not know if your state is judicial or non-judicial, but here in Florida, I have attorneys who file motions for us in cases like this. Most judges in our area will grant a motion to postpone based on a valid sales contract, etc ... Asking some of these lenders to inject one single ounce of reason or logic is like asking Congress to spell intellegence.
It would appear to me that this is damaging the owner for no reason and there should be some sort of protection from the state Attorney General. When HSBC is being made whole and the 2nd lien holder is agreeable to the loss, they 1st lien holder should not have the ability to do this. I know its because a financial analysis shows they can wipe out the 2nd and sell for a profit even after the cost of foreclosing, but it is this kind of ridiculousness that has lead to $million judgments. Good luck, keep us updated
Hey Jimmy Payne,
Well, we actually have two attorney's on the "case" now but, it's not to protect my commission....hell, at this point, I would forfeit my commission to protect my client and do what is in his best interest. The problem is, I am not even being given that option.....in fact, I am being given no options even though, I brought an offer that would pay HSBC off in full. What is absolutely shocking is that HSBC can't see the wisdom in taking a full pay off in lieu of foreclosure.
I know TN is like GA and not a judicial foreclosure state but maybe you could find an attorney to file for a protective order to prevent the sale in order to preserve and protect your commission. I would think a Superior Court judge would agree that this is not in the best interest of the community.
The banks are successful because our government, in it its infinite wisdom, has allowed them to gamble with our money. And ,better yet, the government makes good on their lousy bets even when those go south !
That's called " win win " for the banks, " lose lose " for us !
Status Update # 2 as of 10/10/2013 - I called corporate US Bank 1-651-466-3000 to speak with Richard Davis, President and CEO. I believe that if someone in the corporate office could hear about how US Bank will most likely miss out on any chance of recouping their loss when HSBC forecloses due to a simple lack of urgency on US Bank's part....maybe that would spur some action. The man who answered the phone said I should speak with Christina Onstott as she is in charge of Short Sales. He Transfers me to her and I left he a message.
On a side note, Daniel Aubry, you are absolutely correct. These banks have policies and procedures in place that do not allow their front line employees the freedom, liberty or common sense to make decisions that help their own institutions. It's amazing to me that these banks can be so successful with such flawed policies.
The banks are dinosaurs. And like those huge tiny brained animals they are destined to eventual extinction.
But in the meantime they are doing incalculable harm to lots of defenceless " little people ". I have a similar situation where the owner wants to do a " cash for keys " deal and the bank wants her to fill out twenty forms.
This is an 80 year old Hispanic lady so it's just not going to happen. In the meantime the property is
literally rotting away and empty. And when the bank does end up foreclosing they'll have an unsaleable
property. Does it make sense? Of course not. But try telling the bank that !
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