HSBC Holdings Plc (HBC: Quote,HSBA.L) has agreed to pay $249 million to settle claims of improper U.S. foreclosures, the Federal Reserve Board and Office of the Comptroller of the Currency or OCC said Friday.
Earlier this month, the Federal Reserve and the OCC announced that they had reached agreements in principle with Aurora, Bank of America, Citibank, Goldman Sachs, JPMorgan Chase, MetLife Bank, Morgan Stanley, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo. Like the other institutions, HSBC is subject to enforcement actions for deficient practices in mortgage loan servicing and foreclosure processing, the OCC said.
With the addition of HSBC, nearly 4.2 million borrowers will receive a total of $3.6 billion in cash compensation while an additional $5.7 billion will be provided by the servicers for mortgage assistance, the OCC said.
The sums paid by HSBC include $96 million in direct payments to eligible borrowers and $153 million in other assistance, such as loan modifications and forgiveness of deficiency judgments.
More than 112,000 borrowers whose homes were in foreclosure in 2009 and 2010 with HSBC Bank and nonbank subsidiaries of HSBC will receive cash compensation under the agreement in principle. Eligible borrowers are expected to receive compensation ranging from hundreds of dollars up to $125,000, depending on the type of possible servicer error, the OCC noted.
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by RTT Staff Writer
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