HSBC Foreclosure Insight: What Happened to One Homeowner Trying to Save Her Home from Foreclosure While Working with NACA, Part III
Written by Guest Contributor
This is a follow-up post to HSBC Foreclosure: What Happened to One Homeowner Trying to Save Her Home from Foreclosure While Working with NACA. In this part, I wanted to tell readers about one important fact that I didn’t learn until I was at the end of my time working with NACA to stop foreclosure.
Did You Know? Some Lenders Won’t Work with You Directly to Stop Foreclosure
When you file bankruptcy (as I’d done in an effort to free up funds to be able to afford to keep my home), many lenders won’t work with you directly. You have to go through a third-party agency like NACA or HUD. Another reason they may not want to deal with you directly is if your loan isn’t an FHA loan.
All three of these applied to my home loan with HSBC, ie, it wasn’t an FHA-backed loan. In fact, it was darn near impossible to find out who owned the loan. A lot of homeowners have this problem by the way, which is why it can be so frustrating to even start the home loan modification process.
In the 2+ years I worked with NACA, I was told everything from HSBC didn’t own the loan; they were just the servicer, to the fact that it was a “privately owned” loan. What they meant by privately owned — from what I could surmise — is that the loan wasn’t a government-backed loan (eg, Fannie Mae, Freddie Mac), but it was likely owned by some corporations or other non-government-backed entities.
Why It’s Important to Know Who Owns Your Home Loan
When I first went to the NACA seminar in 2011, some lenders were there on site who were working with homeowners and modifying loans. If it’s a privately owned loan, then it likely has to go through some type of corporate board approval.
My lender, HSBC was not on-premise at the NACA seminar I attended (surprise, surprise). And, when the NACA rep who processed my paperwork said, “At least let me find out who owns your loan so you can start the process of working with them, I was told that it was “privately owned.” The rep then went on to tell me that these were some of the hardest types of loans to get modified.
And boy, did she turn out to be right! Over two-and-a-half years later, my loan never was modified by HSBC. It was simply sold off. I assume from the paperwork I received that HSBC did own the loan — they weren’t simply the “servicer.”
Post continued below . . .
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Stopping Foreclosure: Why It’s Important to Know the Difference between a Home Loan Owner and a Home Loan Servicer
Servicers simply handle all the paperwork, eg, your payments, paying your homeowners insurance and taxes (if you escrow); etc. They do NOT own the loan. Think of a servicer as simply and administrative assistant to the home loan owner.
Some companies own their home loans AND process them; ie, they’re the servicer and the owner. But, many mortgage companies don’t. And this is why it’s important to know who OWNS your home loan because only the owner can modify your home loan. Your servicer can’t do this.
Now that you understand this difference, let me get back to why some lenders won’t work with you directly. As I said, I’d filed bankruptcy. I put my home in the bankruptcy just in case I wasn’t able to get it modified. When you file bankruptcy and the debts are discharged, it’s illegal for those you owed to try and collect the debt from you.
Speed Up the “Stop Foreclosure” Process by Using a Third-Party Rep to Send In Your Mortgage Modification Paperwork
So I think that’s the reason HSBC wouldn’t work with me directly, even though I offered to sign paperwork to the effect that they’d advised me of my rights and weren’t breaking any laws and trying to force me to pay the mortgage debt. To avoid even the hint of this, many lenders will ask you to go through a third-party rep.
While NACA was very helpful overall, I could have used any third-party, eg, a friend or family member to submit the paperwork. I didn’t have to go through NACA (or any other formal organization). I could have just called up my lender, told them that so-and-s0 was presenting paperwork on my behalf, and asked them what I needed to send in.
FYI, the person you use as your rep can’t have the same address as you (ie, be living in the same residence as you), and you might be asked to send in a signed/notarized letter saying that this person is sending in mortgage modification paperwork on your behalf.
I wished I’d known this sooner because NACA’s submission system was pretty stringent as far as what you had to submit. They had budget forms for you to fill out, P&L statements, legal documents to sign off on (eg, the Dodd Frank form (pdf file)), etc.
While I appreciate how thorough they were, when you’re submitting the same paperwork over and over again, it gets to be time-consuming. And, every time you submitted new paperwork, a NACA counselor had to go over it with you and sign off on it before it’s submitted to your lender. Towards the end of my dealings with NACA, there were days on end — one time more than a week — when I couldn’t reach anyone at NACA, which delayed the process.
The reason was, NACA gives “save home” seminars all over the country and sometimes there simply aren’t reps manning the phones because their people are “in the field.” This is what I was told.
Again, while I appreciated how thorough and professional NACA was, I’m finding it much easier to work directly with my new lender. They have submission guidelines as well, but I haven’t had to submit nearly as much paperwork. And, I get to call up and speak directly with a rep at the company, without having to go through a third-party, then having them get back to me via a note left in a computerized NACA file.
A Speedy Process with My New Lender
I submitted my paperwork to my new lender on July 31st. The lender received it and had it entered into their system as of August 9th. A rep called me on 8/21 to let me know that she was reviewing my file and I would have an answer about my home loan modification request before the end of the month.
Getting My Formerly Owned HSBC Home Loan Modified in 30 Days
So from beginning to end, the process will be about 30 days (if I receive an answer before the end of this month).
Again, I’ve been going through this process for almost three years and it’s been a frustrating, tiresome process. I feel like my life has been on hold because I can’t make other life decisions until this process is complete.
And this is why I wanted to share my story with other homeowners — especially those who’s home loans were/are owned by HSBC. They were known as a lender that was impossible to work with and it was practically impossible to find first-hand info on working with them. This is another reason I’m sharing.
My hope is that it helps some other stressed, frustrated homeowner who’s at their wit’s end.
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© 2013 Yuwanda Black for Foreclosure Business News. Content may not be reprinted or reproduced in any manner without the express, written consent of the author.