HSBC reaches $470 mil­lion ac­cord over fore­clo­sure abuses

The Pak Banker - - FRONT PAGE -

HSBC Hold­ings Plc will pay $470 mil­lion to end US probes into al­le­ga­tions of fore­clo­sure abuses in­clud­ing robo-sign­ing that may have de­prived strug­gling bor­row­ers of op­por­tu­ni­ties to keep their homes.

Fed­eral and state of­fi­cials said on Fri­day that the bank's North Amer­i­can sub­sidiaries reached a set­tle­ment with the US Jus­tice Depart­ment, fed­eral hous­ing and con­sumer pro­tec­tion reg­u­la­tors and 49 states as well as the District of Columbia. The HSBC set­tle­ment paves the way for smoother loan mod­i­fi­ca­tions and pro­vides for pay­ments to some bor­row­ers for past fore­clo­sure abuses, ac­cord­ing to a state­ment from the Jus­tice Depart­ment. The bank will also be re­quired to re­form its prac­tices, and an in­de­pen­dent mon­i­tor will be in­stalled to over­see the changes, ac­cord­ing to the state­ment. The set­tle­ment "will cre­ate tough new ser­vic­ing stan­dards that will en­sure fair treat­ment for HSBC's bor­row­ers and pro­vide re­lief to cus­tomers across New York state and across the coun­try," New York At­tor­ney Gen­eral Eric Sch­nei­der­man, who was one of the of­fi­cials in­volved in the ac­cord, said in a state­ment. HSBC's 136,000 loans in New York state ac­count for more than 31 per­cent of the bank's mort­gage port­fo­lio, ac­cord­ing to Sch­nei­der­man.

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