Question about loan modification under Obama plan with HSBC?

I am really only looking for input from people in the Real Estate and Mortgage Industry on this question. My parents have an ARM through HSBC. They can't refinance because they are upside down in the loan and currently my mom is not working due to a debilitating illness. We are aware that they can get a hardship modification for 6 months. But I've advised them to try to get a modification under the Obama plan because while it won't have as large an impact in the immediate future they will be better off in the long term. My mom talked to someone at HSBC on March 2nd, they were very nice and discussed the hardship assistance with her and she asked about the Obama plan, and was told they wouldn't have all of the details on that until the following week and to call back then. So 2 weeks go by and then they get a letter in the mail from HSBC saying if they are having trouble making their mortgage payments they might be able to help. After much prodding from me my dad finally called and asked about the Obama plan. He was told that HSBC was no longer servicing new loans in the United States and that the only assistance available was the 6 month hardship assistance. My question is what does them not making new loans have to do with anything? They are obviously still servicing my parents existing loan because they are still taking their payments. Is this true that HSBC is not participating in the new modification programs because they are not writing new loans or was this particular person giving my dad the run around? I am a licensed realtor so I do understand some of this, but I am also very newly licensed so I would like some insight from someone who's been in the business for a while. Thanks! Oh I forgot to put in here, my parent's ARM is set to adjust in August, they currently are paying 10% interest and based on what I read in their note, it can go as high as 17%

8 months ago - 2 answers