The voluntary suspension of seizures was started last Fall on the heels of criminal and civil probes launched by federal and state authorities into lenders' suspected faulty mortgage practices. Many servicers voluntarily halted foreclosures when improper practices, namely so-called “robo-signing,” were discovered, igniting an industry-wide scandal. Authorities have since found that some of the nation's largest lenders engaged in these practices, illegally seizing dozens of homes by deceiving local courts, violating both state and federal regulations in the process.
For its part, HSBC did not initiate a moratorium on repossessions until November 5th, according to filings with the SEC, even though a number of other major lenders enacted foreclosure halts several months earlier. The bank's two main U.S. subsidiaries, HSBC Bank USA and HSBC Finance Corp., now say that foreclosures are still being suspended in certain sections of the nation due to questionable foreclosure filing procedures.
According to statistics provided by the Federal Reserve, HSBC initiated more than 43,000 home repossessions between 2009 and 2010. The bank's latest admission that problems still exist underscores the difficulty servicers are having in correcting faulty practices that went on for years before being discovered last Fall. According to a report prepared for state attorneys general by the Bureau of Consumer Financial Protection, these faulty procedures saved the nation's five largest mortgage servicers over $20 billion since the onset of the housing collapse in 2007. That number does not include HSBC's savings made through improper procedures.
In April, HSBC was among fourteen major lenders to be sanctioned by the Fed and the Office of the Comptroller of the Currency for improperly filing foreclosure documents. Representatives from the nation's five largest lenders, Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, and Ally Financial, are meeting this week with state attorneys general and members of President Obama's administration to discuss possible punishments for their discretions. Many of the officials want fines of $30 billion or more, while bank officials have said they would collectively pay $5 billion to settle the claims.
Search San Diego Real Estate
