The first thing that is important is to know that Household Finance Company (HFC), Beneficial Finance, and HSBC are all the same company. It is important to know this because it is easy to mistake them as seperate companies (even though HFC & Beneficial appear on the top of all their documents) when shopping around for comparitive rates.
The problem does not so much lie with the sales staff/account executives (a fancy term for loan officers) themselves, but with the twisted perspective of their management. Many times I have heard the managers boss (I can only assume some sort of regional or district manager) screaming bloody murder through the walls of the building in an attempt to "motivate" the manager and sales staff. In one instance a branch manager recounted a tale of one district manager throwing a stapler at him.
I believe this is generally what has lead to my negative experiences with the HFC/Beneficial franchise. Periodically I would be called to submitt and application with the intent of, "lowering my payment, getting me into a fixed loan, or providing cash out." This is all well and good, and I can not in ANY WAY fault the sales staff for soliciting me through the phone. In fact, I appreciate the call knowing that I can check the status of my account. The problem is with the approach management has them take.
Management has them pitch any deal that will sells. 3rd mortgages, 1st mortgages with benefits the customer does not want, running running credit checks with socials without the permission of the borrower, allowing no flexability with loan programs, forcing me to pay for the appraisal in the cost of the loan, and my personal favorite; ignoring customers longterm interest in order to meet managements goal.
In one particular case I needed to refinance. Badly. I was overwhelmed with credit card problems, and my daughter's new autoloan was in danger of becoming delinquint if my financial situation didn't improve. I had a couple collections placed on my accounts several years before after having moved and failing to remember a couple smaller debts which were now negatively affecting my credit score. Also, the credit cards I did have were over 50% of their high credit balance - thus my scores were affected negatively even further!
Having previously worked in the mortgage industry, I knew I could refinance and consolidate all of my high interest debts into one simple, smaller payment; get some cash out to tuck away in my savings for a rainy, and clear up some of my collections in order to get me back on track credit wise.
I had paid down a lot of my mortgage and new that I should leverage my best asset to make money for me - my house. The best solution to this problem WAS to enter an adjustable rate mortgage. The reason for this is that I wanted a manageable payment and ARMS offer a considerably lower interest rate. I had good reason for wanting to only stay with that mortgage for 2 years (afterwchich the rate would adjust) as my credit was in the tank with the collections. An adjustable would allow me to afford a manageable payment, and in 2 years time refinance on my terms into a fixed rate after my credit had improved.
HFC wouldn't do it. They pitched me a fixed rate at 10% using only 65% of the value of my home. Total. It sure did clear up all my debt, and consolidate my payment, as well as give me 5K out, but my payment jumped by $200. They told me that their guidelines prohibited them from offering adjustables. I politely asked my payment would be if it was an adjustable, to which the AE (account executive AKA loan officer) replied; Oh it looks like it would probably drop by $500! That's PER MONTH!
This AE was not trained to look out for my long term goals, and completely refused to discuss any such options. They pitched me on something called an express equity. A program by which I decide the value of my home, and they give me a mortgage based on that. No appraisal. No checks to make sure my home isn't being overvalued. No consideration for the welfare of the customer. They also could not negotiate rate.
I asked if I could load up the front end with fees into order to reduce the rate - this is a common occurance; the higher the closing costs, the lower the rate and vice-versa. It allows the borrower to make their own educated decisions based on what is important to them and match the loan to their goals. The AE looked at me like I was from Jupiter.
The AE said that the fixed rate with 5K cash out met their guidelines for benefits and said I should take it. The AE's are not taught to look into all the options, they are slapped into a set of rules, and told to not look outside their box. Apparantly management is so scared of bad press, they take away the right of the consumer to choose the best product.
In summation, this is but one example of where HFC/Beneficial did not look out for my longterm interests. I have a mechanic for my car, a plumber for my plumbing, an agent for my insurance; shouldn't I have a mortgage bank for my mortgage? HFC/Beneficial will not be that mortgage bank.
I have since worked with a new company to get my finances on track. Fortunately, this company was a fair bit wiser and saw that I would outlive the 2 year fixed period, and they put me into an ARM. They offered me several different options including IO, but I was pleased with the ammortized ARM, and they contact me every 4 months to make sure my financial situation is still good. They don't even try to take an application, they just check in to see how I'm doing. They have already scheduled an appointment for me to redo the loan into a fixed rate and get me into a better program. ASLO, they COMPLETELY PAID FOR MY APPRAISAL! That's $350 to $500! It wasn't even rolled into the cost of the loan. The loan officer I spoke with at this new company told me that the company felt something as important as your home (in his words 'traditionally americans' single larges asset) is not for rolling dice with. The new company feels that everyone they do business should know the value of their home without paying for it. A selling point sure, but it makes sense.
Never again will I work with HFC/Beneficial. I was so relieved to be free of their yoke and allowed to make my OWN decisions as a free man that I will recommend ANY other company before HFC/Beneficial.
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