HSBC in dock for 'flouting US laws on mortgage foreclosures'
Nikhil Kumar is The Independent's New York correspondent. He was formerly assistant editor on the foreign desk and has also done a variety of jobs on the city desk, where he wrote about markets, commodities and other business and economics topics.
Wednesday 05 June 2013
HSBC failed to comply with New York state laws that give homeowners facing foreclosure an early shot at negotiating a settlement, thus putting them at greater risk of losing their homes, the state's attorney general alleged in a new case against the bank yesterday.
The claim against HSBC Bank USA and HSBC Mortgage Corpora-tion (USA) centres on a New York law that calls on residential mortgage lenders who sue for foreclosure to make a filing called Request for Judicial Intervention with the county clerk. That triggers a settlement conference within 60 days. The provision is meant to give homeowners an early chance at renegotiating their loans and safeguarding their properties without incurring the burdensome fees that they might face during a drawn-out process.
New York attorney general Eric Schneiderman said HSBC had "repeatedly" failed to follow this provision. His office said a sampling of HSBC foreclosure filings from four New York state counties threw up 300 instances when the bank had failed to make a timely filing. In certain cases, the bank is alleged to have waited two years before making the filing, while charging interest and other fees. "Companies like HSBC are brazenly ignoring state law, leaving homeowners across New York stuck in a legal limbo where they can't even get the legally required settlement conference that could help them keep their homes," Mr Schneiderman said.
HSBC said it was committed to complying with the law when it comes to foreclosure. It said it would "respond appropriately to the State AG in this matter".
Announcing the lawsuit yesterday, the attorney general's office cited the example of Rebecca Karm, a resident of Erie county who was "fighting foreclosure after suffering from medical issues and losing her job". Ms Karm, they say, had to wait "hundreds of days" for a settlement conference – something that cost her "thousands of dollars."
Mark Schroeder, the Comptroller of Buffalo, said the bank "needs to be held accountable for flouting a state law designed to help people keep their homes". "Foreclosures are a major problem in Buffalo, and banks should be trying to fix the situation, not make it worse."
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