HSBC to pay $249M in case over wrongful foreclosures

Ben Stansall/AFP/Getty Images

NEW YORK British bank HSBC (HBC) will pay $249 million to settle federal complaints that its U.S. division wrongfully foreclosed on homeowners who should have been allowed to stay in their homes.

The agreement with the Federal Reserve and the Office of the Comptroller of the Currency is similar to deals with 12 other banks that ended a review of loan files required under a 2011 federal action. Combined, the 13 banks will pay $9.3 billion.

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The settlements could compensate Americans whose homes were seized because of abuses such as "robo-signing," when banks automatically signed off on foreclosures without properly reviewing documents. The agreement will also help eliminate huge potential liabilities for the banks.

Consumer advocates say regulators settled for too low a price by letting banks avoid full responsibility for foreclosures that victimized families.

Under the settlement, HSBC will pay $96 million in cash compensation to about 112,000 homeowners. The rest - $153 million - will go toward reducing mortgage balances and forgiving outstanding principal on home sales that generated less than borrowers owed on their mortgages.

The payments to homeowners could range from hundreds of dollars up to $125,000, depending on the type of possible error.

"We are pleased to have reached this agreement ... and believe it is a positive development that will benefit homeowners," HSBC said in a statement.

The bank said it expects to record a pre-tax charge of $96 million for the fourth quarter of 2012 related to the cash compensation part of the settlement. The $153 million in mortgage relief to be paid is expected to be covered by the bank's current reserves and not to require a charge, the bank said.

The structure of the deal is nearly identical to the others announced this month with Bank of America (BAC), JPMorgan Chase (JPM), Wells Fargo (WFC), Citigroup (C), MetLife Bank (MET), PNC Financial Services (PNC), Sovereign, SunTrust, U.S. Bank (C), Aurora, Morgan Stanley (MS) and Goldman Sachs (GS).

Ally Financial has been in discussions with regulators on a similar settlement but has yet to reach deals.

Banks and consumer advocates had complained that the loan-by-loan reviews required under the 2011 order were time-consuming and costly and didn't reach many homeowners. Banks were paying large amounts to consultants to review the files. Some questioned the independence of those consultants, who often ruled against homeowners.

The settlements don't close the book on the housing crisis, which brought more than 4 million foreclosures. They cover only borrowers who were in foreclosure in 2009 and 2010. And resolving millions of claims involving multiple banks and mortgage companies is complicated and time-consuming.

The deals announced this month are separate from a $25 billion settlement struck last February with five major banks by the federal government and 49 states. Those banks are Ally, Bank of America, Citigroup, JPMorgan and Wells Fargo.

[wileamcare]

I personally think that bankruptcy is much better than foreclosure. You seem to bounce back from bankruptcy a lot faster now days. They have secured credit cards and all kinds of ways to rebuild you credit. But foreclosure is more like an event that even with recovered credit, could keep you from buying another home. Even if the information is no longer on your credit report after seven years, your lender is still going to ask you is you had any previous foreclosures or not. There's an article below that talks about using loan mods and/or bankruptcy to stop the foreclosure process that I liked.


http://www.reversemortgagelendersdirect.com/reverse-mortgage-information/
http://www.reversemortgagelendersdirect.com/reverse-mortgage-calculator/
http://www.reversemortgagelendersdirect.com/reverse-mortgages-pros-and-cons/

[PamRagland]

In the recent OCC deal with the banks the banks are getting off easy. And they KNOW IT. The OCC deal victimizes people AGAIN. Thanks to my published appeal "Ragland V US Bank", people may be able to sue for MILLIONS ... and may get $800.

How do they know someone's home was unlawfully foreclosed on, when they stopped reviewing? Those people will get the least. My loan was FORGED and SWAPPED. The Statute of limitations on FRAUD (punitive damages) doesn't start until you discover the fraud—even if they got their loan 10 years ago. Are these people signing their rights away?

See below...

There may have people now who are losing their homes. Check out the appeal I won in Sept. & my video. I tell people what to do, starting for FREE. Also they can receive more detailed instructions at the link below.

Check out my published appeal case, at the site below. It impacts literally MILLIONS of people with the 6 different precedents I set.

"Ragland V US Bank" Precedents:

• I proved loan forgery with a handwriting expert (this was and may still be rampant... I can explain more why I say that but any loan since 1999 at least is suspect)
• My loan was forged so it could be swapped to one of those "bad" variable loans. The statute of limitations on FRAUD starts when you FIND THE FORGERY. Carries PUNITIVE damages
• I was granted the ability to sue for EMOTIONAL DISTRESS in a property case
• My loan was sold under a restraining order waiting period. They admitted at the time knowing it was illegal. It was so easy, I cannot be the only one.
• Anyone who has been told not to pay their payments and can prove it even with notes (many others)
• Anyone who has had any bank REFUSE ANY PAYMENTS. I know many people who got 1 month behind for example were told they had to pay everything or the bank would not accept their payment at all. My case ruled that was not OK "profiting from your own wrongdoing".
• Then the court ruled there is a private right of action (you can sue) for violating state foreclosure laws.
• Lastly, the court ruled on the "runaround" I received, also, and that is a concept in the law called "Promissory Estoppel". Punitive damages also...

Please please check out my case... video... or this press release. I The OCC deal is the banks trying to cheat people again. You think they don't know about my case? Of course they all do. Not right!!

http://www.RaglandVUSBank.com -- has my YouTube video (this is where people can also go for help, I am helping others with their cases, too)

Here is my recent press release, I won another hearing last week where they tried to limit my damages to $25K:

http://www.emailwire.com/release/115540-Single-CA-Mom-Beats-US-Bank-In-Both-Landmark-Wrongful-Foreclosure-Appeal-Win-and-Subsequent-Attempt-to-Squash-Her-Case.html

Pam Ragland