HSBC has agreed to a $249m accord to settle claims of improper U.S. foreclosures, joining 12 other mortgage servicers in a deal that now exceeds $9bn, according to banking regulators.
Bloomberg reports that U.S. units of Europe’s largest bank signed a deal with the Federal Reserve and the Office of the Comptroller of the Currency to pay $96m in cash to 112,000 U.S. borrowers it foreclosed on in 2009 and 2010 and provide $153m in other mortgage help, according to a statement by the Fed and OCC Friday. HSBC was among lenders accused of rushing home foreclosures by using flawed documents.
Ten of the largest U.S. mortgage servicers, including JPMorgan Chase & Co. (JPM), Bank of America Corp. and Citigroup Inc. (C), agreed to an $8.5bn settlement with the Fed and the OCC on January 7th. Last week, Goldman Sachs Group Inc. (GS) and Morgan Stanley (MS) joined the deal with the Fed, ending their faulty foreclosure history with a $557m package of cash and other assistance.
After a U.S. housing-market collapse started the worst U.S. financial crisis since the Great Depression, mortgage servicers were accused of engaging in improper foreclosure practices, including so-called robo-signing of documents. In almost two years since regulators ordered the largest U.S. servicers to hire independent consultants to conduct case-by-case reviews of foreclosures, none of the borrowers has been compensated.
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image: © Howard Lake