February 5, 2016
Carson City, NV – Today, Nevada Attorney General Adam Paul Laxalt announced a $470 million joint state-federal settlement with mortgage lender and servicer HSBC to address mortgage origination, servicing and foreclosure abuses. In addition to Nevada, the attorneys general of 48 other states and the District of Columbia, along with the U.S. Department of Justice, the U.S. Department of Housing and Urban Development and the Consumer Financial Protection Bureau also participated in this settlement. As a result of this settlement, it is estimated that Nevada residents may receive more than $1 million.
The settlement provides direct payments and loan modifications to certain Nevada borrowers, as well as other forms of relief for borrowers in need of assistance. Additionally, the settlement establishes rigorous mortgage servicing standards and an independent monitor with oversight authority.
“Mortgage lenders have a responsibility to treat borrowers fairly, and these newly imposed standards will ensure just that,” said Laxalt. “This settlement holds HSBC accountable for its past abuses and establishes tough servicing standards to prevent this from happening again.”
Approximately 1,300 Nevada borrowers may be eligible to receive a payment from the national $59.3 million fund created for payments to borrowers. Borrowers may be eligible for this payment if their loans were serviced by HSBC, if they lost their home to foreclosure from January 1, 2008, through December 31, 2013, and if they encountered servicing abuse. The borrower payment amount will depend on how many borrowers file claims, and eligible borrowers will be contacted with instructions on how to qualify for payments.
Under the terms of the agreement, HSBC is required to provide certain Nevada borrowers with loan modifications or other relief. The modifications include principal reductions and refinancing for underwater mortgages. HSBC will decide how many 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 of $470 million.
The settlement also requires HSBC to substantially change how it services mortgage loans, handles foreclosures and ensures the accuracy of information provided in federal bankruptcy court. The terms of the agreement will prevent HSBC from engaging in past foreclosure abuses, such as robo-signing, improper documentation and lost paperwork.
In Addition to Nevada, other states participating in the settlement include: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin and Wyoming.
Senior Deputy Attorney General Sheri A. Forbes of the Attorney General’s Bureau of Consumer Protection represented Nevada in this matter.
For more details on the settlement and HSBC’s independent monitor, click here.