HSBC has agreed to pay the U.S. government and states $450 million related to mortgage lending and foreclosure misconduct that contributed to the financial crisis in the country.
According to BBC News, the agreement, which HSBC CEO said is a "positive result," requires the British bank to pay $100 million in fine and another $370 million in consumer relief to borrowers in 49 states, as well as the federal government and the District of Columbia.
"Throughout the housing market downturn, HSBC stayed focused on home preservation and approached foreclosure as a last resort option, and this agreement affirms our commitment to assisting customers who are facing financial difficulties," Madison said.
The Wall Street Journal noted that HSBC's compliance to the deal will be monitored by an independent body for a year. With the settlement, HSBC is required to bring about changes in its mortgage business in the country such as cutting loan amounts for borrowers who are nearing default. The bank is also ordered to modify its foreclosure practices in the U.S.
U.S. authorities started investigating the foreclosure processes in the country back in 2010 when some banks were found to be submitting bogus foreclosure documents; HSBC was said to be approving foreclosure documents even without proper review. WSJ noted that in 2013, allegations for the same offense from the Federal Reserve and the Office of the Comptroller of the Currency resulted in HSBC paying $249 million. In 2012, U.S. banks such as JP Morgan and Bank of America also entered the same deal, as per BBC News.
In other news, HSBC has curbed its mortgage lending to some Chinese investors in the U.S. as China tries to limit outflow of money from the country. The policy, which prevents the lender to provide mortgages to Chinese buying real estate properties in America, took effect last January.