HSBC Settles Wrongful Foreclosure Lawsuit
HSBC is now the latest big bank to pay up in order to settle claims by federal regulators that it wrongfully foreclosed on homeowners.
The Associated Press (AP) reports that the British bank agreed to shell out $249 million to settle complaints that its U.S. branch used “robo-signing” and other lax paperwork practice to wrongfully foreclose on thousands of homeowners. "Robo-signing" describes the practice of automatically signing off on foreclosures without properly reviewing homeowners’ documents.
Thirteen banks including HSBC will shell out a combined total of $9.3 billion under agreements with the Federal Reserve and the Office of the Comptroller of the Currency to compensate homeowners whose properties were wrongfully foreclosed upon, according to AP.
HSBC is to pay $96 million to nearly 112,000 homeowners; the rest of the money will be used to minimizing mortgage balances and offset any outstanding principal on home sales where the borrower still owed money on the mortgage after the sale, reports The Associated Press.
Based on the type of error, compensation to consumers may fall between hundreds of dollars to $125,000. Consumer advocates have criticized the deals saying that the banks got off easy when compared to the difficulties faced by the homeowners due to the foreclosures.
If you or a loved one has been wronged by a consumer fraud such as a wrongful foreclosure, contact Sokolove Law today for a free legal consultation and to find out if a consumer fraud lawyer may be able to help you.