Home Equity Loan Cancel Questions

[Joel Fraser]

This unfortunately is a long post...Hi all, well I was searching the internet and came across this website. I'm hoping someone can provide me some insight here. Stupid me applied for a $14,850 home equity loan, which is through HSBC. My home mortgage loan is through a local company, this post has nothing to do with them or the mortgage loan they provided me. I received the check for the home equity loan soon after January 1st of this year. Once I got the check, I decided to hold on to it until I had decided if I really wanted to cash it or not. A month went by, I still had no cashed the check, and I was sent a bill in the mail from HSBC for about $177.00. I was not aware nor was I told that I would still be billed regardless if I had cashed the check or not. I was also not informed that I was to pay about $177.00 a month, which is too much for me to pay. I was under the impression it was going to be around $70.00 a month, which probably would have been fine. After getting the bill I decided I wanted to cancel the loan, but soon found out, I only had 3 days from the day I signed, so it was to late do this without penalty. I waited another month, and got another bill in the mail and was not to happy. I called and Indian guy on the phone said if I didn't pay it, it would hurt my credit, so I paid it. I also asked him what I needed to go cancel the loan. He gave me a # to fax over some information to the research department. I did this, got a letter in the mail saying that HSBC had put an advanced stop payment on the loan or the check. I have no idea what means, even looked it up on google and still couldn't find anything, I assume it's just what HSBC uses internally or maybe lot's of places use it, I'd just never heard of it. Anyway, I spoke to some friends and they all basically said they can't bill you for a check you never cashed, and they can't take your house since they aren't the mortgage company. Worst that can happen is that there will be a lien on the house and my credit will practially be shot. I thought to myself well if all it's going to do is ruin my credit, then so be it, so I started to ingore the bills. Well yesterday I get a letter in the mail saying my loan is in default and in order to avoid losing my house and forclosing, I should call the # listed on the paper lol. So I called the #, got another Indian guy on the phone who transferred me to the cancellation department or something where I got another Idian guy on the phone, (HSBC must obviously outsource). Anyway what he said was, was that I had to cash the check, then send the company a check for the loan amount. I also had to pay the bills I had accumulated and a $500 cancellation fee, all up about $895, which I thought wasn't to bad since I would just make monthly payments on that until it was paid for, BUT, he also said I had to pay the principle back as well as taxes. I asked how much that would be, he said this information changes daily (?) and that there is no way for him to even guess as to how much that would be. I forgot to ask, so I'll ask it here in the hopes that someone can help, (and this is the reason for the posting, and again I'm sorry for making it so long, I just wanted to let you know the situation). I want to keep the house I am paying off. I'm the only one that lives there and I pay all my other bills on time, I just don't want this loan anymore. My guess is, on top the $895, the cost of the principle and taxes will be somewhere between $7000 and $8000, does that sound about right? In otherwords, the principle and taxes I have to pay back on top of the $895 is on the LOAN amount, NOT just what I had accumlated in unpaid bills with HSBC ($895), is that correct or am I wrong, will be less? I'm hoping it will be less. If I end having to payback about $22,000 on a $15,000 loan that I never touched, I'm guessing they'll allow me to pay back about $80.00 a month for the next 10 - 15 years until it's paid for, or will it be even worse? I am VERY concerned I've totally screwed myself over a stupid home equity loan, totally my fault, I am not blaming HSBC, but I don't want them to take my house either... Thanks for reading.Mike.