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Mortgage provider settles foreclosure abuse case

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CONCORD, N.H. - Attorney General Joseph A. Foster announced Friday, that 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 New Hampshire

borrowers for past foreclosure abuses, loan modifications and other relief for borrowers in need of assistance, rigorous mortgage servicing standards, and grants oversight authority to an independent monitor. The settlement includes New Hampshire and 48 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 relief to New Hampshire borrowers," Attorney General Foster said. "Through tough servicing

standards, this agreement compels HSBC to treat its borrowers much more fairly in the future."

The agreement's mortgage servicing terms largely mirrors the 2012 National Mortgage Settlement reached in February of 2012 between the federal government, 49 state attorneys general, including New Hampshire, and the five largest national mortgage servicers.

That agreement provided consumers nationwide with more than $50 billion in direct relief, created new servicing standards, and implemented independent oversight.

The HSBC agreement requires the company to provide certain New Hampshire borrowers with loan modifications or other relief. The modifications, which HSBC chooses through an extensive list of options, include principal reductions and refinancing for underwater mortgages. HSBC decides how many loans and which loans to modify, but must meet certain minimum targets. Because HSBC receives only partial settlement credit for many types of loan modifications, the settlement will provide relief to borrowers that will exceed the overall minimum amount.

Approximately 515 eligible New Hampshire 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 abuse will be eligible for a payment from the national $59.3 million fund for payments to borrowers. The borrower payment amount will depend on how many

borrowers file claims. Eligible borrowers will be contacted about how to qualify for payments.

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