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HSBC North America Holdings has agreed to pay $470 million to settle allegations it engaged in abusive practices in its mortgage foreclosure, origination and servicing operations.
The massive joint state-federal settlement with HSBC was announced by the Department of Justice, the Department of Housing and Urban Development, the Consumer Financial Protection Bureau, 49 states and the District of Columbia.
As part of that settlement, HSBC will pay a total of $470 million in relief to consumers and payments to federal and state parties, and will be bound to mortgage servicing standards and be subject to independent monitoring of its compliance with the agreement, the DOJ said in a statement.
Highlights of the National HSBC Settlement include:
- $370 million in relief for borrowers who are still in their homes
- $58 million in cash to foreclosed homeowners
- Modeled on National Mortgage Settlement
Specifically, under the terms of the settlement with the DOJ, HUD, the CFPB and the states, HSBC will be required to substantially change how it services mortgage loans, handles foreclosures, and ensures the accuracy of information provided in federal bankruptcy court. The terms will prevent past foreclosure abuses, such as robo-signing, improper documentation and lost paperwork.
The settlement’s consumer protections and standards include:
- Making foreclosure a last resort by first requiring HSBC to evaluate homeowners for other loss mitigation options
- Restricting foreclosure while the homeowner is being considered for a loan modification
- Procedures and timelines for reviewing loan modification applications
- Giving homeowners the right to appeal denials
- Requiring a single point of contact for borrowers seeking information about their loans and maintaining adequate staff to handle calls
Joseph A. Smith Jr. will oversee HSBC agreement compliance for one year. Smith will oversee implementation of the servicing standards required by the agreement and issue public reports that identify whether HSBC complied or fell short of the standards imposed by the settlement.
If HSBC is alleged to have violated terms of the agreement, the states and federal agencies can seek relief through the court.
Additional terms of the National HSBC Settlement include the resolution of potential violations of civil law based on HSBC’s deficient mortgage loan origination and servicing activities.
The agreement does not prevent state or federal authorities from pursuing criminal enforcement actions related to this or other conduct by HSBC, or from punishing wrongful securitization conduct that is the focus of the Residential Mortgage-Backed Securities Working Group.
Furthermore, the agreement does not prevent any action by individual borrowers who wish to bring their own lawsuits.
The agreement was filed as a consent judgment in the U.S. District Court for the District of Columbia.
Borrowers who are eligible to participate in the HSBC Settlement will be mailed a postcard followed by a Notice Letter and Claim Form in August 2016.
Borrowers who believe they are eligible but have not received a Notice Letter by September 2016 may contact the settlement administrator.
Who’s Eligible
Borrowers must meet certain minimum criteria to be eligible to receive a settlement payment. In particular:
- The loan was serviced by HSBC at the time of the foreclosure sale
- The loan went to foreclosure sale between Jan. 1, 2008 and Dec. 31, 2012
- The borrower made at least three payments on the loan
- The home (or foreclosed property address) was, or was intended to be the borrowers’ primary residence at the time the mortgage loan was obtained
- The borrower had a mortgage loan secured by a one-to-four unit residential property
- The unpaid principal balance of the first-lien mortgage loan did not exceed $729,750 for a one-unit property; $934,200 for a two-unit property; $1,129,250 for a three-unit property; or $1,403,400 for a four-unit property.
Note: Borrowers will be ineligible to receive a payment from the National HSBC Settlement if they received a payment from: (i) The National Mortgage Settlement, involving Bank of America, JP Morgan Chase, Citibank, Wells Fargo, and GMAC/Ally, (ii) the National Ocwen Settlement, involving Ocwen Loan Servicing, Litton Loan Servicing, and American Home Mortgage Servicing Inc. (AHMSI) aka Homeward Residential; or (iii) the National SunTrust Settlement.
Borrowers from Oklahoma are not eligible for any of the direct payments because Oklahoma elected not to join the settlement.
Potential Award
VARIES.
Eligible loans will receive a minimum payment of approximately $780 from the National HSBC Settlement. The amount you will actually receive if you submitted a timely claim is very likely to be more, because the $780 figure is based on 100 percent of the eligible borrowers participating.
Proof of Purchase
N/A.
The online Claim Form process requires claimants to enter in the customized claimant ID number from the top of the notification letter they received.
Claim Form Deadline
11/15/2016
Case Name
United States of America, et al. v. HSBC North America Holdings Inc., et al., Civil Action No. 16-0199, in the U.S. District Court for the District of Columbia
Final Hearing
N/A
Settlement Website
Claims Administrator
National HSBC Settlement Administrator
888-538-5792
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25 thoughts onNational HSBC Mortgage Loan Class Action Settlement
Got my check today and it was $1212
i had to spend a lot of money and file bankruptcy in order to keep my home from foreclosing, it left me devestated no savings, and dead broke. I had an audit done by an accredited law fir and it revealed they violated the FAIR CREDIT ACT IN TRYING TO FORECLOSE on my home. when i finally had them they sold the loan to prevent going to court. can i file?
I was told I’m eligible but the amount is just not enough for what I have been though since the lost of my home .Six years since the lost and I’m still homeless. I been living in a nightmare.$780, dollars is not going to take my nightmare away.I want to go after them for more
We went after more. Be sure of your attorney if you do. We ended up settling for not much ( less than our legal fees) and still losing our home. I’m pretty sure this suit does not disqualify you from persuing a private suit. Good luck.
I wpuld love to file against them
When will we receive the check?
You should contact the settlement administrator with any questions about your claim. The settlement website includes a number you can call to ask questions. Good Luck!
I just checked the website and they stated that they “anticipate the checks to be mailed in the first quarter of 2017 but an exact date is not known”.
I just wonder if there is a way to find out the amount one will receive, or will they all be around the 780 amount
I don’t remember receiving a form from my bank, which is Bank of America.
This particular settlement is an HSBC Mortgage settlement. You should call the settlement administrator if you have any questions about whether or not you are a class member. Both the article and the settlement website list the toll free number.
I miss place my letter and I need my claimant ID number how do I go by get a copy of this
You’ll need to call the settlement administrator at the toll free number provided and discuss your claim status. The settlement website states to call Mon – Fri, 7am – 7pm, Central time. Good luck!
it won’t let you apply unless you have a claim number
How do I know if I had them at the time, my home was foreclosed 2009
You should just apply
Got my postcard in the mail in July, and my letter with my ID claim number in August. Waiting on that check now!
I never received a card in the mail. I just received the letter the other day. I have crappy mail service.
Nice. At least you got your letter. That was the important part! :-) with the claim number.