She’s 60 years old and works two jobs, earning about $30,000 a year. She’s divorced and has raised four sons, and she has been paying on her small home in Akron’s Kenmore neighborhood since 1985. She took out a mortgage in her own name in 1990 for $20,000. More than 15 years and six refinancings later, she owes $57,000. That may be more than the home is worth. She said she could sell it for $62,000. Summit County tax records show it’s appraised for $54,590.
Welcome to the world of HSBC and subsidiaries Household Finance (HFC) and Beneficial Finance. Similar to payday loans and high cost income tax loans, HSBC profits when mortgagees pay interest forever, while never paying down the principle. Like the old days of the company store, indentured servants pay HSBC and Household International for the rest of their lives while never escaping a mountain of debt. They are slaves to HSBC, and should consider giving their homes to HSBC.
Barbara Fongheiser, described above, was among thousands of Americans who got checks from a settlement negotiated by Beneficial’s parent, Household International Inc. Her check was for $1,100. That was 2003. It’s a safe bet Household International and HSBC made their $1100 back. Fongheiser is an example of many who said the settlement was a joke, not coming close to compensating victims of predatory lending. When 48 states negotiated the settlement with Household International they were cautious ‘because they did not want to put the company out of business’ with a larger settlement. Household’s CEO failed to tell anyone that HSBC was going to purchase Household International.
Fongheiser said “They put warnings out about sexual predators,” she said. “Why don’t they warn people about these mortgage companies?” That’s where Household – HSBC Watch comes in. Warning customers and potential borrowers about Household International and HSBC since 1999, the consumer advocacy website has been around for years and is number one in Google for the past three years. “We try to warn everyone before the fact, not after. It does no good to say ‘I told you so’ when the actual solution is to boycott HSBC and Household International” said a member of Household- HSBC Watch.
When a reporter contacted Beneficial about Fongheiser’s situation, a spokesman said the company would have to research her account. “It’s always in the best interest of the company and the customer for the customer to stay in the home,” spokesman Rahsaan Johnson said. Several days later, Johnson offered an e-mail response, again not speaking specifically about Fongheiser: “If a customer faces foreclosure, we work aggressively with them to make their payments more manageable.”
Many mortgage holders, and the SEC, understand what Rahsaan Johnson really meant. Read the response, if you can call it a response, to actually say ‘We will put your already inflated interest rate and past due balance on the end of your loan, making you think you are current while adding to your mountain of debt.’ And the real kicker is these debts are usually second mortgages, where the primary mortgage holder is protected from scavengers like HSBC. Fongheiser is now in bankruptcy while trying to save her home from foreclosure and a sheriff’s sale. HSBC already recouped much more than they loaned to Fongheiser. Perhaps it’s time for them to disappear in bankruptcy or Fongheiser can give the home back to the primary mortgage holder. Lincoln freed the slaves and company stores where declared illegal years ago if the workers were paid in script and forbidden to leave if they owed money to the company.
HSBC will continue to make shady loans, company spokespersons will continue to avoid answering questions, and perhaps a boycott of HSBC is a bad idea after all.
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