Shows & Panels
- The 2014 Big Picture on Cyber Security
- AFCEA Answers
- Ask the CIO
- Building the Hybrid Cloud
- Connected Government: How to Build and Procure Network Services for the Future
- Continuing Diagnostics and Mitigation: Discussion of Progress and Next Steps
- Federal Executive Forum
- Federal Tech Talk
- The Future of Government Data Centers
- The Future of IT: How CIOs Can Enable the Service-Oriented Enterprise
- The Intersection: Where Technology Meets Transformation
- Maximizing ROI Through Data Center Consolidation
- Mitigating Insider Threats in Virtual & Cloud Environments
- Modern Mission Critical Series
- Moving to the Cloud. What's the best approach for me
- Navigating Tough Choices in Government Cloud Computing
- The New Generation of Database
- Satellite Communications: Acquiring SATCOM in Tight Times
- Targeting Advanced Threats: Proven Methods from Detection through Remediation
- Transformative Technology: Desktop Virtualization in Government
- The Truth About IT Opex and Software Defined Networking
- Value of Health IT
- Air Traffic Management Transformation Report
- Cloud First Report
- General Dynamics IT Enterprise Center
- Gov Cloud Minute
- Government in Technology Series
- Homeland Security Cybersecurity Market Report
- National Cybersecurity Awareness Month
- Technology Insights
- The Cyber Security Report
- The Next Generation Cyber Security Experts
Shows & Panels
HSBC to pay $249M to settle foreclosure-abuse case
Friday - 1/18/2013, 3:14pm EST
WASHINGTON (AP) - British bank HSBC 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.
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, JPMorgan Chase, Wells Fargo, Citigroup, MetLife Bank, PNC Financial Services, Sovereign, SunTrust, U.S. Bank, Aurora, Morgan Stanley and Goldman Sachs.
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.
(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)