A New York court has dismissed a lawsuit filed by the state's attorney general against HSBC Mortgage Corporation nearly two years ago which alleged that HSBC failed to follow the state law related to foreclosure actions.
New York Attorney General Eric Schneiderman originally sued HSBC in June 2013, accusing the mortgage company of violating state law by delaying the filing of paperwork known as a "Request for Judicial Intervention" (RJI) which mandates that the lender attend a settlement conference with the delinquent borrower within 60 days in order to work out a foreclosure alternative such as a loan modification to keep them in their homes. Schneiderman's lawsuit alleges that HSBC's failure to file paperwork in a timely manner allowed foreclosure cases to languish in the New York courts and prevented approximately 25,000 borrowers from potentially receiving loan modifications.
New York was one of the states hit the hardest by the foreclosure crisis. According to January 2015 data released by CoreLogic, the state's foreclosure volume (4.0 percent) was nearly three times the national average of 1.4 percent.
According to a report from Reuters, New York State Supreme Court Justice John Michalski ruled that HSBC's delay in filing paperwork did not constitute a violation of the state law as claimed by Schneiderman, and that the possibility that HSBC violated the state law cannot serve as the basis for a lawsuit.
"Despite this ruling, Attorney General Schneiderman will continue to fight for families struggling to recover from the housing crisis--whether it's helping communities deal with the scourge of abandoned properties, funding legal services and housing counselors around the state, or forgiving debts to ensure families can stay in their homes," said Matt Mittenthal, spokesman for the New York AG office.
Representatives from HSBC did not immediately respond to a request for comment.