Sunday, June 9, 2013

NY AG Adds HSBC To Targets Of Upcoming Lawsuits Over Foreclosure Practices

Bloomberg reports:

  • HSBC Holdings Plc (HSBA) broke New York foreclosure law and put homeowners at greater risk of losing their homes, according to New York Attorney General Eric Schneiderman, who said he is suing the bank [].

    A state investigation found that HSBC (HSBA) has left homeowners languishing in foreclosure by failing to meet requirements for giving them an opportunity to negotiate loan modifications, according to Schneiderman’s office.
  • Schneiderman said in May that he was prepared to sue Bank of America and Wells Fargo (WFC) for allegedly violating terms of the nationwide settlement, which set requirements for servicing mortgages and provided monetary relief for homeowners. Schneiderman said the lenders have failed to comply with standards for processing applications from homeowners for loan modifications.
  • Lenders and servicers who sue to foreclose in New York must file paperwork that triggers a requirement that a settlement conference be held within 60 days.

    The state found that HSBC failed to file the required paperwork in hundreds of foreclosure cases in New York, in some cases putting off the document filing for more than two years. HSBC continued to charge interest and fees, increasing the amounts owed by homeowners. Those charges reduce the likelihood a person will qualify for a loan modification because their principal balance has increased, according to the state.

    The attorney general will seek to recover restitution and damages for homeowners and force HSBC to file the required papers in pending foreclosure actions and future cases.

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