London-based megabank HSBC agreed to shell out $470 million to end a series of investigations by the U.S. Justice Department and 49 state governments into its mortgage-servicing practices following the 2008 financial crisis.
The government agencies were investigating allegations that HSBC employed tactics such as the robo-signing of documents aimed at stifling mortgage borrowers’ attempts to avoid foreclosure.
The settlement agreement will require HSBC to change the offending practices, and will install an independent monitor at the bank to oversee the changes. It will also provide for payment to some borrowers, according to a statement from the Justice Department, Bloomberg reported.
The company’s loans in New York State – 136,000 in total – account for more than 31 percent of its mortgage portfolio, according to the Attorney General’s Office.
In January, HSBC announced it would no longer provide mortgages to an unspecified subset of Chinese nationals looking to buy in the U.S. [Bloomberg] – Ariel Stulberg