Destin Florida Short Sale – "Missing" Mortgage

I listed a short sale home near Destin, Florida.  The seller told me he had two loans, the first with Countrywide, and the second, or junior lien, with HSBC Mortgage Services.  We received a fair market value offer about three months ago.  I faxed the short sale package to both lenders, and made my follow up phone calls to confirm receipt.  HSBC told me “We no longer have the loan”.  OK, well, where is it? They told me the loan was charged off over two years ago and it had gone to RMS, a collection agency.  I called RMS.  They said they did not have the loan, nor ever had the loan.  So, I called HSBC back.  Same story.  I called RMS.  Same story, they never had the loan. 

I kept calling HSBC back, asking for supervisors, going through this loop for about two weeks.  I asked my seller to dig through his paperwork to try to find the last document about his mortgage.  He had received nothing for over a year, no bills, no calls, nothing.  So, next I called my favorite title agent, Debbie Cahill at Touchstone Land Title in Destin Florida.  Debbie and her trusted associate, Lee Ann Borden, checked the MERS system for me.  MERS stands for Mortgage Electronic Registration Systems.

MERS is used by many loan servicers to more easily keep track of who the end-investor is on the loan. MERS may be the registered “owner” in public records although the loan may be traded between end-investors.  MERS indicated HSBC STILL owned the loan!  Armed with this documented information, I called HSBC again.  Same response.  Then I started faxing.  I faxed the HSBC a letter stating we needed to close the property and they HAD TO RELEASE THEIR LIEN, with a copy of the printout from public records and MERS proving they owned the loan.  I faxed them every day for another two weeks.  No response.  I left messages on different numbers for HSBC.  Still nothing.  Honestly, I was about ready to throw in the towel.  My title agent had never had this happen in her entire career.  I did not have any options.  The property simply could never sell without the release of the HSBC lien.

Finally, a lucky call by the title agent got a sincerely interested response from someone in the HSBC MERS department.  She said she would try to help!  After two months of relentless pursuit, HSBC at last admitted they owned the loan.  And guess what?  They approved the Short Sale yesterday!

Never give up!