• Report: #294941

Complaint Review: Hfc Beneficial - Hsbc

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  • Submitted: Thu, December 27, 2007
  • Updated: Wed, May 02, 2012

  • Reported By:Waco Kentucky
Hfc Beneficial - Hsbc
577 Lamont Rd Elmhurst, Illinois U.S.A.

Hfc Beneficial - Hsbc double-dipping interest Hazard Insurance scam direct violations of 2002 settlement re: prepayment bankruptcy reaffirmation fraud Elmhurst Illinois

*Consumer Suggestion: Attorney Interested In Your HSBC Mortgage Hazard Insurance Class Action

*Consumer Suggestion: Attorney Interested In Your Problem With HSBC

*Author of original report: hsbc beneficial after 6 weeks account history received/altered/interest and charges greater than total of payments due

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BACKGROUND:In 2001 I was talking into taking out a mortgage with Hfc/Beneficial.Altough my home was paid for had several high interest credit cards. The GFE( good faith estimate) I received was for $56,000 for 15 years @$585.00 per month. When contract was signed became $63,000. When first statement was received balance was $71,000 @$794 per month. When I ask about this they stated I could pay off balance plus $7100 prepayment penalty.Since I had already paid off other bills was no way I could do this.In 2002 was advised by Commonweath of Kentucky Attorney General's office of lawsuit against Hfc/Beneficial. Read further for flagarant violations of that agreement.

PRESENT HORRORS: pursuant to 2002 settlement between Ffc/Beneficial and the 50 attorneys-General and the District of Columbia- Article 5 in part ' all real estate secured loans closed between 1/1/1999 to 9/30/2002 prepayment penalties are not payable after 24 months from the origination of said loan'
In March of 2004 I filed for protection under bankruptcy. As part of that bankruptcy proceedings I reaffirmed the mortgage.Follows is a description of how Hfc used that reaffirmation to violate the 2002 settlement and add 1000's of dollars to account balance. In April 2004 my attorney received a letter from Hfc stating ' Account balance equals $65,506.66 this amount includes all monies due past and present'. This was signed and sent to Hfc when we received the reaffirmation papers back the balance was $67,891.74
which included $2385.08 in deferred interest.
The reaffirmation was dated for a first installment to become due on 06/30/2004 to give bankruptcy time for discharge.In7/2004 an amount of $6800 was added and hidden on the back side of account. This was not discovered until I had arranged refinancing in March of 2006. This constitutes an interest charge of $6800 in LESS THAN 30 days. However the prepayment penalty originally stated on the loan was 10% on outstanding balance. Therefore it appears Hfc had treated the reaffirmation as a refinance and added the prepayment penalty to the loan as deferred interest well after the 24 months allowed by the settlement.
Re: 2002 settlement Part 20 para B ' the amount of deferred interest and interest short as of the date of last payment shall be disclosed on the Borrow's monthly billing statement'
The $6800 deferrment of July 2004 does not now or never has appeared on monthly statement. It was only discovered when I arranged refinancing in 2006.
Re: 2002 settlement part 25 para A ' Hfc shall provide payoff information within (5) business days of written request'

When refinancing was sought in 2006 payoff information was requested on 03/06/2006 it was not received until 04/27/2006 (51 days) and showed a payoff approx. $8000 higher than statement balance. When this placed the value of home below new mortgage threshold the refinance was not consummated. Hfc then added another approx. $1000 to the deferred interest for March and April. When I withdrew monies from 401K to bring account current Hfc withheld interest accured from last payment AND left deferred interest. This has happened at least 3-4 other times where I have allowed account to go 30 days in order to withdrew funds to make multiple payments and interest has been taken for both months from proceeds AND added to deferred amounts.

IT GETS WORSE: I have had insurance on my home under the same policy since 1990 uninterupted. In Sept. 2004 (note bankruptcy date) I received notice from Hfc that due to the fact that I had no insurance on my property they were placing hazard insurance on my property and adding it to my monthly payment. I called and informed them I had insurance and would not pay the extra and my insurance company faxed them a confirmation of insurance effective 12/15/2003 to 12/15/2004. This happened again in 2005 & 2006.

IT GETS REAL WORSE: In August of 2007 I again got a notice they were obtaining Hazard insurance on my home at a grossly inflated rate of $827.13 for $75000 of fire only insurance. My premiums are $523 per annum for $100000 and is full coverage with contents and liability (big differance)(( their insurance company)). My insurance company again( 3rd year in a row) sent them confirmation of coverage. In Sept. Hfc attempted to take an extra $68 out of my bank account for insurance premium. When I blocked withdrawals they began to call several times a day at which time I informed them they were getting nothing until they straightened out the payment amount. Finally they called on 12/15/2007 stating that my payments were returned to normal.
I advised I would go to tha branch office on monday to make the payment nad I wanted something in writing to show this was straightened out and would not occur again. On Monday 12/17/2007 I received a cancellation notice in mail staying I owed $514.31 in back premiums from 04/03/2007 ( note that they didnt notify me or try to increase payments until 08/03/2007.

12/22/2007 received call stating all I was due was the regular payments for Oct and Nov 07. Now it appears the insurance premiums and the Oct-Nov interest has been moved to the deferred account making them due at end of loan but still owed.

SAVING THE WORST FOR LAST: It now appears that a grand total of $3220.08 has been hidden on the backside of my account for 4 years of insurance on MY GIRL FRIENDS HOUSE in another county. A house which she sold in 2005. A house which I have copies of the deeds since 1984 showing I have never had any legal connection with. I have spoken to a local lawyer about filing an exorbinate punitive suit due to the fact is has came close to driving my 84 year old mother ( who lives with me) to hysterics and has caused a severe emotional and nervous strain on myself.

However when made aware of the complexity and the sheer number of various counts, the lawyer advised he felt inadaquate to pursue the case any further. Due to limited resources I do not have the means to retain a law firm to continue on an individual basis unless someone can direct me to a firm which will operate on a contiguency basis.

This is not all but only a synopsis with several minor issues left unaddressed

Ace
Waco, Kentucky
U.S.A.

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This report was posted on Ripoff Report on 12/27/2007 03:54 PM and is a permanent record located here: http://www.ripoffreport.com/r/Hfc-Beneficial-Hsbc/Elmhurst-Illinois-60126/Hfc-Beneficial-Hsbc-double-dipping-interest-Hazard-Insurance-scam-direct-violations-of-2-294941. The posting time indicated is Arizona local time. Arizona does not observe daylight savings so the post time may be Mountain or Pacific depending on the time of year.

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Updates & Rebuttals

#1 Consumer Suggestion

Attorney Interested In Your HSBC Mortgage Hazard Insurance Class Action

AUTHOR: Norah Hart - (United States of America)

Helo Ace

Hello, I am a class action attorney and I would like to speak to you about the way HSBC padded your charges with hazard insurance policies. If you would like to look at my website at www.consumerclasslaw.com you will see a brief description of the case against HSBC regarding force placed insurance, or lender placed insurance as it is sometimes called, these are overpriced homeowners insurance policies that are "force placed" on the borrower in place of their original homeowners policy. The force placed hazard insurance policies are often overpriced, and sometimes they force place another hazard insurance policy even though your own original hazard insurance policy is still in place and fully paid.  it sounds like you had that same issue, your policy was fully paid and current.  Even where a borrower's original insurance policy has lapsed because of a missed payment, it is still not justifiable that the bank's replacement insurance policy is two or three times the cost.  It is a widespread problem, Bank of America and Wells Fargo are being sued for this same force place insurance abuse.  If you were charged for an overpriced hazard insurance policy--whether or not your original hazard homeowners policy was paid up or not--I may be able to help you.  Call me anytime at 212-897-5865 or e-mail me at nhart@tznyc.com.   
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#2 Consumer Suggestion

Attorney Interested In Your Problem With HSBC

AUTHOR: Norah Hart - (United States of America)

Hello, I am a class action attorney and I would like to speak to you about the way HSBC increased the cost of your hazard insurance. If you would like to look at my website at www.consumerclasslaw.com you will see a brief description of the case against HSBC regarding force placed insurance, or lender placed insurance as it is sometimes called, these are overpriced homeowners insurance policies that are "force placed" on the borrower in place of their original homeowners policy. The force placed hazard insurance policies are often overpriced, and sometimes they force place another hazard insurance policy even though your own original hazard insurance policy is still in place and fully paid, the same way your policy was fully paid and current.  Even where a borrower's original insurance policy has lapsed because of a missed payment, it is still not justifiable that the bank's replacement insurance policy is two or three times the cost.  It is a widespread problem, Bank of America and Wells Fargo are being sued for this same force place insurance abuse.  If you were charged for an overpriced hazard insurance policy--whether or not your original hazard homeowners policy was paid up or not--I may be able to help you.  Call me anytime at 212-897-5865 or e-mail me at nhart@tznyc.com.   
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#3 Author of original report

hsbc beneficial after 6 weeks account history received/altered/interest and charges greater than total of payments due

AUTHOR: Ace - (U.S.A.)

After 6 weeks and 3 100 mile roundtrips to Franfort Ky branch office where Manager advised he couldn't give me an account history went to Lexington Ky branch where they printed history within 10 minutes. The following week received history in mail from Beneficial. All enteries from 3/30/06 through 10/17/07 had been voided on copy received from beneficial and reentered ( whether I supposed to get the voided copy or not I do not know) reflecting an account balance due discrepancy of $558.58.
The following is a summary of that history showing totals only as total calculations cover 3 full pages.
Total of payments due from 08/30/01 through 08/30/07 less period in bankruptcy proceedings $54044.36. Total amount paid $57687.18 an excess of 3642.32.
Total of interest due @ a monthly avg of $529.91= $38632.33. Interest withheld from payments $44209.94 an excess of $5577.61.
Deferred interest for same period $7378.30.
Restructure totals added to end of loan $8455.21.
This adds up to a total of $21411.12 of interest and ?charges? above the amount of interest due notwithstanding the $3642.32 extra paid above regular payment total.
As stated in earlier report on several occasions (4) I allowed account to go 30 days to receive a demand letter in order to withdraw funds from 401k and made a multiple payment of 3 months to bring account current. These 4 occasions came to a total of $9381.45 of which $9356.91 was taken for interest ( $7554.67 actual + $1802.24 deferred).
When I asked one of thier collection people about this they stated I had to pay interest on the month I missed making a payment. The only way I can match thier figures is to take the interest from the last payment ie: 60 days interest and then add another 30 days interest for the missed payment. Thus they are charging interest twice on the missed month.
All I have to say is if anyone is thinking about doing business with HSBC-HFC-Beneficial. RUN
Two other updates to previous report. Re: bankruptcy- dated 03/24/04 I received a reaffirmation document for $67891.74 including $2385.08 for deferred interest. The due date for first payment was 05/30/04. This amount was stated to include all monies due past and present. Per the account history on 03/24/04 (same date as reaffirmation) a restructure amount of $3973.85 was added to end of loan. This amount equals the total of the 5 payments due during bankruptcy proceedings and included payments due for 03/30/04,04/30/04 and 05/30/04. these due dates were as much as 90 days in the future.
Second update Re: hazard insurance- as of 01/08/08 I still have not received declaration pages of insurance placed of GIRL FRIENDS home in 2004/05/06/07. These were requested on 11/12/07. The only thing I have are the letters stating insurance had been placed on this property. Total premiums in excess of $3000. $2571.53 for 05/06/07 (do not have a copy of letter for 04) but all others were well over $500.
If anyone else has similar problems in these areas and has documentation or wants to get the necessary let me know through ripoff report. The more information I can get the better my chances to stick it to them. Warning if you're wanting information on your account be prepared to wait up to 6-8 weeks or longer.
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