When Payment Difficulties Arise

Sometimes life throws you a curve.

We understand that, and we're here to help you. Losing a job, a death or illness in the family or a divorce are just some of the things that can cause your monthly budget to run into trouble.

As soon as it appears you may be in danger of missing or making a late payment, contact us. We'll work with you to try to make the best of a difficult situation, and do our best to work out a plan for you to keep your home.

Here's the information you need to know:

• Who to contact?
• How to avoid foreclosure
• What are the options?
• Hardship assistance
• Frequently Asked Questions

Who to contact:

You've decided you need to talk to us. Maybe you haven't missed a payment yet, or maybe this is the first time you are paying late. We want to help you before it becomes serious.

Start with our Collection Counselors at 1-800-338-6441.
A counselor will listen to your situation and help you determine if it needs a short- or long-term solution. Based upon the situation you've encountered and the methods available to correct the situation, we will work with you or refer you to a Default Resolution team member for longer term assistance. The Default Resolution Team is an experienced group of mortgage servicing professionals that can offer counseling and assistance to you during your period of hardship.

A hardship situation is generally defined as a situation beyond your immediate control that results in the default of your mortgage and may ultimately lead to foreclosure. Common hardship situations may include the following:

• Loss of job or reduction of income
• Death of the homeowner, spouse or family member
• Illness of homeowner or family member
• Divorce or separation
• Forced job relocation by employer

Assistance may be available. Request a workout package by submitting our Hardship Assistance form.

Remember - our goal is to help you before it becomes too late. You chose your home because it fit your budget and your lifestyle. We'll do our best to make sure it stays that way.

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How to avoid foreclosure:

It's not inevitable.

If you are experiencing or have recently experienced a hardship and are unable to keep up with your mortgage payments, it is extremely important for you to contact HSBC and address the issue as quickly as possible. Our Collections Department has counselors available that can work with you to make short-term payment arrangements.

You can reach our Collection Counselors, toll free at 1-800-338-6441.

If you are unable to make arrangements with our Collections Department to cure the arrears (missed payments and fees), we may send a workout package to you that must be completed and returned to HSBC. This information is necessary to qualify you for workout options.

You may also request a workout package on your own online using our Request Hardship Assistance form.

Upon receipt of the required information, the Default Resolution Team will initiate a review of workout options. It is important to note that the initiation of a workout review does not waive any remedies available to HSBC under the terms of your Note and Mortgage.

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What are the options:

It is important to note that the Workout Options available to you may be limited dependent on the following factors:

1. the type of loan that you have
2. which investor holds your note, and
3. which mortgage insurance company insures your loan (if you carry mortgage insurance on your loan).

Retention Options are workout plans that can help you keep your property. These options are usually considered after you overcome the hardship that resulted in default on your loan. You might now have the ability to resume making regular monthly mortgage payments, but be unable to come up with the total amount past due. The following options are considered Retention Workout Options:

• Special Forbearance/Forbearance Agreement:
  A formal, written agreement between you and HSBC to reduce or suspend monthly payments for a pre-determined period of time. This will give you the opportunity to recover from your hardship. At the end of this time period we will review for further options to bring the account current.
• Repayment Plan:
  A formal, written agreement between you and HSBC in which we accept your regular mortgage payment and a portion of your arrears for a pre-determined period of time. These plans are designed to bring the account current over a period of time and avoid the initiation of foreclosure.
• Stipulation Agreement:
  A formal, written repayment agreement between you and HSBC to bring the account current after a foreclosure action has begun. The plan suspends the foreclosure action and is designed to bring the account current. The plan payments consist of your regular mortgage payment plus a portion of the arrears each month for a pre-determined period of time. These plans are designed to bring your account current over time. The foreclosure action would be cancelled if the plan were successfully completed.
• Loan Modification:
  A program in which a portion of the arrears may be added to your remaining principal balance, to bring the account current. It may also be possible to adjust the term of your loan and/or reduce your interest rate.
• Claim Advance:
  (FHA loans or Conventional loans with Private Mortgage Insurance) These plans allow for arrears to be cured by advances made by the insurer of your loan. The funds advanced by the insurer are used to bring your account current and you (as the homeowner) are obligated to repay the funds advanced. You may be required to sign a promissory note to repay the insurer through monthly installments or in one lump sum at a pre-determined time. On FHA loans this option would require an additional lien to be placed on the property.

Liquidation Options are workout plans that allow you to transfer ownership to the lender or to a third party for less than a full payoff. These options may be considered if you have suffered a hardship, are unable to financially recover, and have insufficient equity to sell your property and pay off the loan in full. The following options are considered Liquidation Workout Options:

• Pre-Foreclosure Sale/Short Sale:
  If your property value is not sufficient to pay the loan in full, HSBC may be able to accept less than the full amount owed. Sale proceeds are accepted as settlement for the debt. You may or may not be required to sign a promissory note for the difference or a portion of the difference.
• Discounted Payoff:
  This option allows you to retain the ownership of the property in return for proceeds that may not be sufficient to pay your loan off in full.
• Deed-in-Lieu of Foreclosure:
  This option allows you upon approval to deed your property to HSBC, the investor, or insurer as settlement in lieu of foreclosure. Property must be free of all other liens.

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Request for Hardship Assistance:

To begin the process you will need to send some personal information to HSBC. This information must be provided by all parties on the Note and Mortgage. The following information must be provided to HSBC to initiate a workout review:

1. A hardship letter explaining exactly what circumstances caused your default (please include exact dates and figures).
2. Completed hardship form. You can use either one of two methods to do this:
   • Submit our online Financial Disclosure form.
     Please note: a workout review will not be initiated until all the required documentation is received. If you submit an online form, the additional information is still required.
   • Print out a copy of the Financial Disclosure Form, complete it and mail it to us, along with the additional information.
3. Copies of the past two years' tax returns.
4. Copies of the two most current bank statements (i.e. Savings, checking, credit union).
5. Copies of the two most recent pay stubs (including unemployment, compensation, disability,or SSI).
6. A copy of the listing agreement if the property is listed for sale.

The above information may be mailed to:

HSBC Mortgage Corporation (USA)
Attn: Default Resolution Team
2929 Walden Avenue
Depew, NY 14043

Or you can fax the information to:

HSBC Mortgage Corporation (USA)
Attn: Default Resolution Team
(732) 352-7519

If you have any questions regarding the required information, please contact the Default Resolution Team at (888) 648-3124.

It is important to note that the initiation of a workout review does not waive any remedies available to HSBC under the terms of your Note and Mortgage.

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Frequently Asked Questions:

Is it too late to save my home if I am currently in foreclosure?
No, it may not be too late. We may still be able to help you keep your home.

Can you still help me if I am not delinquent, but I know that in the near future I am going to need assistance?
Yes, we may still be able to assist you. Contact us as soon as possible at 888-648-3124.

Can you still offer assistance if I previously claimed bankruptcy?
Yes, we may still be able to assist you. However, these options may be subject to court approval. You may want to consider authorizing your attorney to discuss workout options with us.

I am in a Bankruptcy now. Are there options to help me?
Yes, we may still be able to assist you. Contact us at 888-648-3124.

What if I want to sell my property, but the offer I have is not enough to pay the loan off in full?
There are situations where we can structure a settlement for the shortage to allow the sale to take place. There are also instances where we may accept the short sale without structuring a settlement on the shortage (See workout options - Liquidation Short Sale.)

What if I have other questions?
If you have any other questions, contact the Default Resolutions team at 888-648-3124.

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