Attorney General Reaches $470 Million Joint Settlement with HSBC

JACKSON, Miss. (PRESS RELEASE) — Attorney General Jim Hood today announced that nearly 500 Mississippi homeowners will receive compensation as part of a $470 million joint state-federal settlement with HSBC to address mortgage origination, servicing, and foreclosure abuses.

The settlement provides various forms of relief to borrowers in need of assistance, including direct payments for past foreclosure abuses and loan modifications. The settlement with the mortgage lender and servicers also establishes rigorous mortgage servicing standards and grants oversight authority to an independent monitor.

The settlement includes Mississippi, 48 other states, the District of Columbia, and the federal government.

“This settlement holds HSBC accountable for its past abusive practices, and it provides relief to Mississippi borrowers,” said Attorney General Hood. “Through tough servicing standards, this agreement compels HSBC to treat its borrowers much more fairly in the future.”

The agreement’s mortgage servicing terms largely mirrors the 2012 National Mortgage Settlement (NMS) reached in February of 2012 between the federal government, 49 state attorneys general, including Mississippi, and the five largest national mortgage servicers. That agreement provided consumers nationwide with more than $50 billion in direct relief, created new servicing standards, and implemented independent oversight.

A subsequent state-federal agreement with SunTrust Mortgage Inc. worth nearly $1 billion was announced in June of 2014.

The HSBC agreement requires the company to provide certain Mississippi borrowers with loan modifications or other relief. The modifications may include principal reductions and refinancing for underwater mortgages.

Approximately 470 eligible Mississippi borrowers whose loans were serviced by HSBC and who lost their home to foreclosure from January 1, 2008, through December 31, 2012, will be eligible for direct payments.

Eligible borrowers will be contacted about how to qualify for payments.

Additionally, the settlement requires HSBC 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.

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