HSBC has agreed to a $470 million joint state-federal settlement to address what New York State Attorney General Eric T. Schneiderman called mortgage origination, servicing and foreclosure “abuses.”
The settlement covers 49 states, including New York state, and the District of Columbia. The U.S. Department of Justice, the U.S. Department of Housing and Urban Development and the Consumer Financial Protection Bureau were also part of the settlement.
“The settlement announced today is a joint partnership that will create tough new servicing standards that will ensure fair treatment for HSBC’s borrowers and provide relief to customers across New York State and across the country,” Schneiderman said in a statement.
Schneiderman said the settlement will provide direct payments to New York borrowers for “past foreclosure abuses, loan modifications and other relief for borrowers in need of assistance, rigorous mortgage servicing standards, and grants oversight authority to an independent monitor.”
Schneiderman said the agreement’s mortgage servicing terms largely mirrors a 2012 national mortgage settlement between the federal government, 49 state attorneys general and the five largest national mortgage servicers. A subsequent state-federal agreement with SunTrust Mortgage worth about $1 billion was announced in June 2014.