HSBC Beneficial Question

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  • #14250
    dficks
    Participant

    Hi, I’ve just learned of NACA and I am trying to decide what to do. We have a 7.75%, 180K loan on a house that is currently worth 145K. We have barely been able to keep up with our payments, as it stadn now we are over 30 days behind. In tow months, my wife will receive the last of her severance payment from a job she got laid off from and we will not have enough to make these payments. One option HFC has which we have not looked into is their own modification which appears to be temporary. However they say they can adjust payments to a lower amount for a time. The problem is, my wife has very little chance of getting the same pay she was at the job she had for 21 years and a temporary payment reduction would be a bandaid solution. I am trying to decide whether or not to alert them to our upcoming financial status and apply to have our payments lowered temporarily, and then work through NACA to get a permanent modification, or whether to bag working with them and just start this process through NACA now.We do have a HELOC 2nd mortgage situation to figure out too but I’ve received a lot of guidance to put that one on the back-burner until we try to modify our first mortgage (ie not pay it). Any guidance on how to proceed?

    #14301
    TTrumble
    Member

    Hello dficks,

    Your best bet will be to work with us from the start. Otherwise you could fall into a trap that few homeowners think of. Should you get one of HSBC’s “legendary” two-year modifications, you could run head-on into a brick wall when trying to obtain another modification afterward.

    In some cases, the investor on the mortgage places a limit on how many modifications a mortgage can receive during its lifetime. Even FHA for example only allows two modifications during the lifetime of the loan. Some private investors only allow one, and a tiny few refuse to do any modifications at all.

    I hope you will work with us from the start so we can work on getting you the best modification possible from the very start.

    Tim Trumble
    Online Operations, NACA
    ttrumble@naca.com

    #14486
    dficks
    Participant

    We will work with you — sorry for the delay in response. Two questions: 1) We have “re-aged” our loan with HFC a couple times, would this (I hope not) count as a modification? Also, we are deeply underwater on a HELOC (about 128,000). We have received two pieces of advice: 1) File chapter 13 bankruptcy which we do not want to do since that is our only debt left besides tax debt (and 1st mortgage / student loan debt) and 2) stop paying them, and let it run its course in collections and ultimately try to settle. The HELOC was a WAMU HELOC bought by Chase. I am wondering of a third option might work, trying to work directly with them through you (after we attempt of 1st mortgage mod) to get forgiveness (which is basically the 2nd option, but with a strategy). Any thoughts on this?

    #14501
    TTrumble
    Member

    Hello dficks,

    Unfortunately, we are not able to work on any type of second mortgage when it is not from the same lender as the primary mortgage. However, there is an organization that specializes in 2nd mortgage/HELOC modifications called NID . You can contact them through their website http://nidonline.org/. Like us, they are a non-profit and their services are free of charge.

    I really can’t discuss bankruptcy here since that is a legal issue and should be discussed with an attorney, and NACA will never tell you to deliberately go into a “strategic default” by not paying on your loan when you are able to do so.

    Bottom line is that I’m just not able to be of much help to you on this one. I suggest you contact NID about the HELOC and discuss your options with them.

    Tim Trumble
    Online Operations, NACA
    ttrumble@naca.com

    #14578
    dficks
    Participant

    Tim — thank you. Just clarifying — are you suggesting we work with NID on both or can we work on the FIrst HFC Mortgage with you and work on the Chase HELOC with NID?

    #14579
    dficks
    Participant

    It feels like we could start this process with HFC and you now, attempt to stay on top of the HELOC payment, and then work with NID after we get the first (hopefully) modified through you guys. It would not be that we could pay the HELOC payment — we struggle to make both payments now – my wife’s severance runs out it will really be an either / or situation.

    #14602
    TTrumble
    Member

    Hello dficks,

    Work on the HFC loan through us and use NID for the HELOC. (We’ve done this hundreds if not thousands of times with other folks, so NID will understand).

    Your logic is actually very sound on starting to work on the HFC loan with us first. In most cases the lender on the second will want to see the primary loan modified before they will grand a mod on the second since HFC is in first position with regard to a foreclosure/short sale, etc. In other words, if Chase wanted to foreclose on the HELOC they would have to pay off the HFC loan from the proceeds from the sale of the home before they would ever see a penny themselves.

    However, it won’t hurt to go ahead and get started with NID also rather than wait for the HFC loan to be dealt with. Get things started with us then go ahead and reach out to NID immediately after.

    Tim Trumble
    Online Operations, NACA
    ttrumble@naca.com

    #14715
    dficks
    Participant

    Thank you for this guidance, Tim. We will do exactly what you suggest. One final question — my wife’s severance is slated to end at the end of May. Becuase of an unexpected and sudden need to spend $3,000 a few months ago ($1,000 on a car repair and $2,000 to replace our water heater), we are currently behind on both mortgages but can make payments on each before that (to at least not get more behind). But sInce we are already behind, does it make sense to start these processes now or should we wait until my wife has truly has lost her income? Oh and I guess a second question — what if either my wife finds a job and / or I get a significant reclassification and promotion /raise while we are in this process? There is some likelihood both could happen, especially the latter (I have been unofficially informed, but I do not know for certain or how much the raise might be). Thank you again and I promise to honor your patience with my questions by beginning this process after your next response 🙂

    #14743
    TTrumble
    Member

    Hello dficks,

    What you are likely to find is that they won’t accept the payments if you are already behind. They will either want the entire amount necessary to bring you current or nothing at all.

    BTW, it’s probably to your benefit that you are behind right now since most lenders will not consider granting a modification unless you are past due. In fact the only exception is what’s referred to as “imminent default”. In short you must be able to prove that you are about to go past due and can’t do anything about it, plus it must be caused by one of the “Four D’s”: Death, Divorce, Disability or Disaster.

    If the financial status for either of you changes, Please submit the necessary information into your file right away and contact your so he or she can make the necessary changes. You definitely don’t want your lender to make you a modification offer only to get it rescinded because the information was not accurate at the time they made the offer.

    Keep us updated on your progress!

    Tim Trumble
    Online Operations, NACA
    ttrumble@naca.com

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