HSBC will Provide $1.8 Million to NC Homeowners Harmed by Abusive Lending Practices
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HSBC will Provide $1.8 Million to NC Homeowners Harmed by Abusive Lending Practices

February 9, 2016

North Carolina homeowners who were harmed by abusive banking practices will see some relief as part of a national settlement with HSBC.

The $470 million national settlement with the bank is expected to bring to North Carolina residents an estimated $1.8 million in cash payments, loan modifications, and stronger rules to prevent future mortgage and foreclosure abuses.

As part of the state-federal agreement, HSBC is required to provide borrowers around the nation $370 million in loan modifications or other relief, including short sales, refinancing at reduced rates, deficiency waivers, forbearances for unemployed borrowers, and deeds in lieu of foreclosure.

About 2,200 North Carolinians who lost their homes to foreclosure between 2008 and 2012 may be eligible for direct cash payments totaling about $1.8 million, which will come from a national $59.3 million fund created under the settlement.

Consumers may be eligible for cash payments if they:

  • Had a mortgage serviced by HSBC
  • Experienced servicing abuses; and
  • Lost their home to foreclosure from January 1, 2008 through December 31, 2012.

North Carolinians who are eligible for cash payments from the settlement will be contacted by a settlement administrator about how to qualify for payments. Payment amounts will vary depending on how many borrowers file claims.

Under the settlement, HSBC is also required to change how it services mortgage loans, handles foreclosures, and ensures the accuracy of information provided in federal bankruptcy court.

The reforms include:

  • Requiring HSBC to evaluate homeowners for other options before beginning foreclosure proceedings;
  • Restricting foreclosure while the homeowner is being considered for a loan modification;
  • New procedures and timelines for reviewing loan modification applications;
  • Requiring a single point of contact for borrowers seeking information about their loans; and
  • Maintaining adequate staff to handle calls from borrowers.

The l settlement with HSBC includes 48 additional states, the District of Columbia, and the U.S. Department of Justice, the U.S. Department of Housing and Urban Development, and the Consumer Financial Protection Bureau.

HSBC consumers who have questions can contact their lenders at the following numbers:

For loans serviced by HSBC Bank USA, contact 1-866-435-7085.

For loans serviced by HSBC Mortgage Services, Household Finance, or Beneficial, contact 1-800-333-7023.