HSBC joined in on the foreclosure settlement with federal regulators over allegations that the bank's practices led to wrongful foreclosures.
The Federal Reserve Board and Office of the Comptroller of the Currency (OCC) announced HSBC will pay $249 million, with $96 million for direct payments to eligible borrowers and $153 million other mortgage assistance. Through the settlement, more than 112,000 eligible borrowers will receive cash compensation.
On January 7, regulators first announced a settlement with 10 servicers for $8.5 billion in cash payments and mortgage assistance over alleged foreclosure actions that occurred in 2009 and 2010. The 10 banks were Aurora, Bank of America, Citibank, JPMorgan Chase, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo.
Then, on January 16, Goldman Sachs and Morgan Stanley came to a similar agreement with regulators to pay $557 million.
According to a statement from the Fed, HSBC's addition to the settlement means nearly 4.2 million borrowers will receive $3.6 billion in cash compensation, while an additional $5.7 billion will be used for mortgage assistance. Borrowers will receive anywhere from hundreds of dollars to $125,000, depending on the servicing error.