TOPEKA – (February 5, 2015) – More than 700 Kansas consumers may be eligible for relief under the terms of a settlement reached with HSBC, Attorney General Derek Schmidt said today.
The agreement filed today in U.S. District Court for the District of Columbia provides direct payments to Kansas borrowers whose loans were serviced by HSBC and who lost their home to foreclosure between January 1, 2008, and December 31, 2012. The settlement also includes other relief for borrowers in need of assistance, such as loan modifications, new mortgage servicing standards and oversight authority to prevent future violations. Schmidt joined attorneys general from 48 other states, as well as the District of Columbia, U.S. Justice Department and U.S. Department of Housing and Urban Development and the Consumer Financial Protection Bureau in the settlement.
“Our office continues to investigate the improper conduct by mortgage servicers during the financial crisis,” Schmidt said. “Today’s settlement marks another step to holding servicers accountable for these unacceptable practices and repaying Kansas consumers for the damage that was done.”
The settlement resolves alleged violations in HSBC foreclosure practices, such as robo-signing, improper documentation and lost paperwork. HSBC is required to substantially change its mortgage servicing and foreclosure practices to prevent future abuses.
The agreement’s mortgage servicing terms largely mirror the 2012 National Mortgage Settlement (NMS) reached between the federal government, 49 state attorneys general, including Kansas, and the five largest national mortgage servicers. That agreement provided consumers nationwide with more than $50 billion in direct relief, created new servicing standards and implemented independent oversight. A subsequent state-federal agreement with SunTrust Mortgage Inc. worth nearly $1 billion was announced in June 2014.
Compliance with the settlement will be overseen by the NMS monitor Joseph A. Smith, Jr. for one year. Consumers who are eligible for the cash payments will be contacted by the settlement administrator but may also contact HSBC directly for more information. For loans serviced by HSBC Bank USA, N.A., borrowers with questions should call 1-866-435-7085 or call their case manager. For loans serviced by HSBC Mortgage Services, Household Finance, or Beneficial, borrowers with questions should call 1-800-333-7023 or contact their single point of contact.
More information on this settlement and the National Mortgage Settlement is available on the Attorney General’s Consumer Protection website at www.InYourCornerKansas.org.