HSBC Horror Stories

BW in South Carolina warns: “After considering bankruptcy, we were forced to tell HFC to accept our offer or take our home. To say the least, this was a very gut-wrenching time for us. When they agreed at the last minute, we thought we had finally detached ourselves from the scum balls that nearly ruin our lives. So much for thinking!

Our agreement, to pay full market appraisal for the house and land was to be accepted as “payment in full.” They however, ignored the agreement and decided, as a parting shot, to call it a “settlement in full,” then filed a form 1099-COD with the IRS and tried to force us to claim their erroneous shortfall as “earned income.” This made our tax return appear incorrect. Now we are dealing with the IRS, which at one point claimed we owed them $29,000.

The amount claimed by HFC to have supposedly been “discounted” from our loan was not a cancellation of debt. It was unearned interest that should not have been added to our balance during any pay-off. Also, it was meant to be a loss of revenue that penalized HFC as part of an agreement upon which HFC was to avoid further legal cost. It also allowed them to escape publicly defending their unethical dealings, deceptive statements, and uncalled for harassment during the time they held a mortgage on our home.

Obviously, we made a poor decision when allowing HFC to refinance our home. Again, after years of paying exorbitant mortgage payments it became evident we were being systematically robbed by this company. To make this point perfectly clear, we received notice of a class action law suit by a group of State Attorney Generals against HFC for their predatory lending practices. When the settlement was announced, it was apparent they had been ‘slapped on the wrist’ and would be allowed to continue their now illegal practices. At this point we decided to end our involvement with HFC. Faced with the prospect of losing our home, we tried every avenue of compromise and they refused to talk with us. Finally, after months of needless turmoil, and when all attempts appeared exhausted, we decided to face foreclosure and lose our home. After weeks of silence and soul searching, we mentally adjusted to our dire straights. Then, just a few days before the court date, we received a call from their representative, unexpectedly agreeing to stop the foreclosure and resolve the issue on our terms.

Since we were mentally and physically prepared to leave and lose our home, we at least wanted to voice our case in legal proceedings and publicly record the atrocities this company had perpetrated on us. As we were to find out later, HFC did not want our case in court. We personally stated our terms to their representative in a very straight forward and clear manner. For the following reasons, their unethical dealings in making such a mortgage with us, their deceptive statements and tactics after the loan was made and the mental anguish they needlessly heaped upon us, we felt they should be penalized. We agreed for HFC to receive appraised value for the house and lot and they in return would consider our mortgage paid in full. Our deed was returned to our legal representative marked paid in full. We did not agree at any time to a cancellation of debt. That would have been a certain deal-breaker on our part and we were more than willing at that time, to put HFC in the real estate business. Therefore, HFCs’ filing of the 1099-COD referencing our account is incorrect. In the least, the filing of that form should be considered fraud on their part for not adhering to the agreed upon resolution, not alerting us to the fact they were filing a 1099-COD and not giving an explanation as to why they were reneging on our agreement.

It was not surprising for us to recently find there are millions of people in the same situation with companies much like HFC. Equally, unsurprising, is the number of class action law suits aimed at making these companies accountable for their wrongdoings. Certainly the crisis in the stock market caused by these unethical companies reveals their abuses and President Bush’s actions of late have further exposed the negative exploitation these companies have perpetrated on many hard working Americans that could least afford it.

Since we began our dealings with HFC, they have done everything legally and sometimes illegally to cause my wife and me harm. They ignored our and our legal representative’s offers for settlement; ignored our and our legal representative’s request for information concerning our loan and purposely dictated foreclosure notices to be served to us on Christmas Eve. Once it was evident we were going to make them appear in court they very quickly decided at the last minute they wanted to allow a settlement in full, but we refused. Then, just as quickly, they accepted our terms and agreed our offer would be considered payment in full. Again, once they received our check, they refused our calls and inquiries and started their dirty tricks campaign. Their latest ploy, after they received a request for a corrected income statement, was to send a very official looking letter requesting my wife to sign a statement that she had agreed to a cancellation of debt and threatened her with a $50 fine by the IRS if she did not comply. We can only guess what they will try next.

It seems very ironic the government, charged with making sure these dastardly deeds are not perpetrated against the public, is now unwittingly partnering with these unethical companies to cause hard working and honest people further harm. We are respectfully, but fervently asking the IRS to reexamine our case and find that HFC erroneously filed the 1099-COD form and therefore, caused our tax returns to appear incorrect. Dealing with HFC is a horrific incident that enters your life. Even if you can struggle free, it will return to threaten and extort your family and cause endless nightmares. Please be aware and warn others of the dangers.”

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