HSBC Bank USA, N.A., agreed to a settlement valued at hundreds of millions of dollars over allegations of abuses in home lending, servicing and foreclosures.
The New York-based firm and its affiliates reached an agreement with the government over charges of mortgage origination, servicing and foreclosure abuses.
A consent judgment will be filed in U.S. District Court for the District of Columbia. Compliance with the agreement will be monitored by Joseph A. Smith Jr.
The settlement was reached with the Department of Justice, Department of Housing and Urban Development and Consumer Financial Protection Bureau as well as attorneys general in 49 states and the District of Columbia.
“The settlement parallels the $25 billion national mortgage settlement reached in February 2012 between the federal government, 49 state attorneys general and the District of Columbia’s attorney general and the five largest national mortgage servicers, as well as the $968 million settlement reached in June 2014 between those same federal and state partners and SunTrust Mortgage Inc.,” a joint announcement from the agencies and attorneys general said.
As part of the agreement, HSBC will pay $100 million, including nearly $41 million to the federal agencies and almost $60 million to the states.
In addition,
HSBC will complete $370 million in creditable consumer relief directly to borrowers and homeowners by July. The relief will come in the form of principal reduction for borrowers who are at risk of default, interest-rate reductions, forgiving forbearance and other forms of relief.
Also as part of the agreement, HSBC will implement standards for mortgage servicing, the foreclosure process and for ensuring the accuracy of information provided in federal bankruptcy court.
In a separate announcement, the Federal Reserve Board said it issued a $131 million
civil money penalty against HSBC North America Holdings Inc. and HSBC Finance Corp.
The Fed’s penalty, which is
the maximum amount allowed by law, is being assessed in conjunction with the agreement with the federal agencies and states.
“The penalty may be satisfied by providing borrower assistance or remediation in conjunction with the Department of Justice settlement, or by providing funding for nonprofit housing counseling organizations,” the Fed stated. “If HSBC does not satisfy the full penalty amount within two years, the remaining amount must be paid to the U.S. Department of Treasury.”
HSBC
issued a statement indicating its commitment to helping distressed borrowers.
“Throughout the housing market downturn, HSBC stayed focused on home preservation and approached foreclosure as a last resort option, and this agreement affirms our commitment to assisting customers who are facing financial difficulties,” HSBC Finance Corp. Chief Executive Officer Kathy Madison said in the statement.
