HSBC and HFC keep homeowners insurance money

John in Lousianna recently sent this complaint about HSBC. He said “Since we refinanced our house in 2006 with HFC, it has been nothing but a complete nightmare. We have been WAY overcharged on “ancillary fees” and “late fees”. At times I have spent nearly two hours at a time on the phone with HFC trying to resolve their errors, and on the phone they admit they see their error. But when I ask for an updated written accounting of our account, the errors are still there.

In one month, we had several hundred dollars added to “late fees” on our statement. I actually have recorded some phone calls with them. A few years back, and without our prior knowledge or authorization, HFC attempted to take a payment out of a bank account through their EZ Pay. The bank account had been closed several months before this attempt.

The bank sent me a letter informing me that “if I continued to try to use a closed account, they would press criminal charges against me for bank fraud”!

Hurricane Gustav damaged our roof. We filed a claim with insurance. HFC received the funds, and would only release a portion of the funds at a time. They actually told me that once we had 30% of the roof work done, they would send out an inspector–that would take about two weeks–and once he saw that the work was done, they would release another 20%, and so on and so on.

The whole roof would only take 1-2 days to complete. But HFC insisted that I needed to do things their way. I refused to open up my roof and leave the whole house unprotected for weeks at a time–it rains quite often here down south.

I was told “write a letter explaining that you need more funds, and you may be approved to get 50% released to you”. I sent this letter by mail twice, and faxed it once. When I faxed it, it was because they claimed that they never got the mailed copies….so I faxed it while on my cell phone.

The guy at HSBC’s Loss Draft department was on the phone with me when I sent it–and he told me that he had received it. He said “I have it right here in my hand, give us a week to 10 days to process this”.

Called back after 2 weeks and they again said “we dont have any letter from you”. This whole time, HFC Loss Draft sent me a letter every month saying “if we do not hear from you about the progress of repairs before this date, we will apply the funds to your mortgage balance”.

Total money received in insurance claim was over $6000….total applied to our mortgage balance was around $3400. We never cashed any check and Loss Draft claims they have no idea where the rest of that money went!

I got so tired of trying to get something done that we just told them to apply the funds in full to the mortgage.

Last year we entered into a forbearance agreement. We have a written agreement for 6 monthly payments. We made every payment on time, fully documented and sent by certified mail. The very first payment of this forbearance was not applied to our mortgage–they said it went to “various ancillary fees” but could not even tell me exactly what fees were paid.

We had an agreement in writing about these payments but HFC broke that agreement with this very first payment. Because the payment did not go where it was supposed to go, they charged us late fees the whole time when we were not one day late. The last payment of this forbearance arrived on time, but they did not sign for it until two or three days after it arrived at their New York address.

Of course, HSBC claimed that this payment was late, and charged us a late fee. Even after spending literally two hours again on the phone trying to straighten this out, and having them admit on the phone that they made these errors, the written account of our mortgage still shows the errors and they claim we still owe the late fees.

HSBC calls the house sometimes a dozen times in one day. I do not even answer the phone when they call because it is absolutely maddening to try to speak with them. I am so tired of having to tell them the same account of our problems each time and still getting nothing resolved with them.

Currently we are trying to get some sort of modification done, holding out hope but HFC has been absolutely no help on this front in the past.”