Consumer complaint received 2017-02-26
Product: Mortgage — Conventional adjustable mortgage (ARM)
Issue: Loan servicing, payments, escrow account — 
Company: HSBC NORTH AMERICA HOLDINGS INC. (MD)

I purchased a house with my ex-spouse as tenant by entirety. The mortgage note ( HSBC Bank ) was only on my ex-spouse name. I never signed nor am on the mortgage note. In XX/XX/XXXX, we divorced. In XX/XX/XXXX, my ex-spouse quit claimed in court settlement and I was to pay the monthly mortgage. There was no assumption of the mortgage. In XX/XX/XXXX, the house was water damaged and insurance proceeds are being held by HSBC. After out of court settlement with the insurance I received additional {$53000.00} that HSBC holds. Currently, HSBC holds XXXX ( estimate ). They demanded settlement document when they had the attorney of the insurance company ( XXXX ) inform that the additional funds were for additional repairs that were not in there original estimate. This letter was issued after my counsel had spoken to the head of their lost draft department and was consistent with the HSBC required document.These additional funds were for me to use as I find necessary and that was not subject to bank withholding the funds. They refused to release the funds without the settlement document I requested in writing a waiver for the settlement documents and also requested that I be permitted to spend the money as necessary as the funds are insufficient. I will provide them with the receipts for which I expend money and they are free to inspect. I requested that I may either just send receipt for material and pay labor, or send the entire project or just labor no material to meet my repair needs. I wrote if they do not give a waiver or extend the flexibility I am seeking as described above I will seek a court action and or file a complaint with CFPB. A week later, when I called to inquire about the outcome, I was verbally informed that they have granted the waiver and no response to my request on the disbursement of proceeds. I requested that they put their decision in writing about the waiver and disbursement of insurance proceeds they have refused to put it in writing as it is not their policy. In a separate letter I had also requested in writing to them to give me excat figure of the interest they have earned since XX/XX/XXXX on my proceeds and I would like that interest to be rolled over into my insurance proceeds I have not gotten a response. I did write if they do not respond i will file with the consumer financial protection bureau and or seek court action. My house repairs can not be started as I have no clarity on how they would disperse the insurance funds, if I spend money and ask for reimbursement they say their exception department would decide if they would reimburse.In short they are holding me as hostage. First of all their mortgage note is defective, so I do not think they can exercise any right on the property, secondly insurance proceeds were on my name and I am not their note holder nor they have any legal right on the property because I never signed the mortgage note. I have tried to work with them but there are too many roadblocks and I can not get my house repaired. If I spend my savings and seek reimbursement if they decided they do not wish to pay then I am prohibited from further repairs. Lastly, can they enforce their mortgage on my ex-spouse or me with a defective note. I will send a copy of the deed if you need it when requested