Texas Attorney General Ken Paxton today announced a $470 million joint state-federal settlement with mortgage lender and servicer HSBC to address mortgage origination, servicing and foreclosure abuses. The settlement provides direct payments to Texas borrowers for past foreclosure abuses; loan modifications and other relief for borrowers in need of assistance; institutes rigorous mortgage servicing standards, and grants oversight authority to an independent monitor.
The settlement includes Texas and 49 other states, the District of Columbia, the U.S. Department of Justice (DOJ), the U.S. Department of Housing and Urban Development (HUD), and the Consumer Financial Protection Bureau (CFPB).
“This settlement holds HSBC accountable for its past abusive practices, and it provides much-needed relief to Texas borrowers,” Texas Attorney General Ken Paxton said. “Through its tough servicing standards, this agreement compels HSBC to treat its borrowers much more fairly in the future.”
The terms will prevent past foreclosure abuses, such as robo-signing, improper documentation and lost paperwork.
The settlement’s consumer protections and standards include:
Payments to Borrowers
In Texas, approximately 2511 borrowers will be eligible for payment. These are borrowers whose loans were serviced by HSBC and who lost their home to foreclosure from January 1, 2008, through December 31, 2012, and encountered servicing abuses. They will be eligible for a payment from the national $59.3 million fund. The borrower payment amount will depend on how many borrowers file claims.
Eligible borrowers will be contacted about how to qualify for payments.
The National Mortgage Settlement’s independent monitor, Joseph A. Smith Jr., will oversee HSBC agreement compliance for one year. Smith served as the North Carolina Commissioner of Banks from 2002 until 2012, and is also the former Chairman of the Conference of State Banks Supervisors (CSBS). Smith will oversee implementation of the servicing standards required by the agreement and issue public reports that identify whether HSBC complied or fell short of the standards imposed by the settlement.
The agreement has been filed as a consent judgment in the U.S. District Court for the District of Columbia.
For more information visit this website: http://www.nationalmortgagesettlement.com/