HSBC confirms will pay $470mln to settle mortgage probe

HSBC confirms will pay $470mln to settle mortgage probe

PanARMENIAN.Net - HSBC confirmed on Monday, Feb 8, that it is paying $470 million to settle an investigation into suspect mortgage lending, loan servicing, and foreclosure practices in the U.S. in the run-up to and wake of the 2008 financial crisis, Business Insider reports.

The U.S. Justice Department first announced the fine last week and HSBC confirmed it in a statement to UK shareholders on Monday. Acting Associate Attorney General Stuart F. Delery says in Friday's statement that the fine is to "hold HSBC accountable for abusive mortgage practices."

The fine is comprised of a $100 million cash payment to participating federal and state parties and $370 million in customer relief. It follows an investigation that began in 2010 after HSBC was found to be signing off mortgage foreclosures without proper review.

The Justice Department's Benjamin C. Mizer said in a statement: “This settlement illustrates the department’s continuing commitment to ensure responsible mortgage servicing. The agreement is part of our ongoing effort to address root causes of the financial crisis.”

Cliff White of the Justice Department’s U.S. Trustee Program said in the same statement: “Homeowners in financial distress sometimes depend on chapter 13 bankruptcy to help them catch up on their payments. When banks violate bankruptcy laws at the expense of homeowners and other creditors, they must pay a price. This settlement holds HSBC accountable for its actions and helps to protect the most vulnerable homeowners.”

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