Ashley Milano  |  August 29, 2016

Category: Closed Class Actions

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This settlement is closed!

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HSBC Bank

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

  1. Betty Hazlett says:

    I was railroaded into a high interest 1st mortgage in 2005 and a 2nd mortgage refinance in 2007 to pay off student loans, do some remodelling and repair my credit. HFC promised after I was with them a few years they would refinance me combine the first and 2nd mortgage into one loan at a low interest rate.In 2008.They appraised my homes value higher than it was and allowed me to borrow agaist that.When the market fell in 2008 and then they went out of business I found myself with an underwater mortgage.Then they sold my mortgage to SPS a mortgage servicer.Even though my payments have always been on time the interest rates are close to 10%. I will never be able to pay this off.Most of my payments are going to interest and next to nothing being applied to the principal. My home never went into foreclosure but I was ripped off by HFC and should be able to go after them.

  2. Tameria Ricker says:

    I did get in on the class action lawsuit I didn’t know about it beneficial rio me off totally changed my fixed rate Mortsgge to what I just found out is now adjustable with a ballon and prepayment penelte I cant find anyone to help me fight against this. They sold my load to caliber and caliber to a servicer now after a terrible illness they are trying to foreclose on me. My house has a sale date. I’m just finding out all the things they have done. I only owed 70 thousand when they convinced me to go with them that same loan is now over 135 thousand. How can they get away with this

    1. Tameria Ricker says:

      I did not get in on class action

  3. Ron says:

    Beneficial is still doing it to people who have current mortgages, they moved my loan to a “servicer” so I wouldn’t meet refinance guidelines and to make things worse they are claiming that these loans aren’t included in the settlement because they weren’t foreclosed on yet…

  4. debbie jones says:

    I filed and never got a check. I call the no and gave rep my claim id no. I was told we didn’t met all the qualification and rejection letter were sent out. I never received no rejection letter in mail

  5. Jules says:

    Checks are in the mail! I got mine today for $1,212.42 :)

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