Posted January 21, 2013 by Lisa Johnson in World

HSBC Holdings PLC (ADR) (NYSE:HBC) to pay $249Million over foreclosure settlement - WFC & JPM


Northern, WI 1/21/2013 (avauncer) - HSBC Holdings PLC (ADR) (NYSE:HBC) will pay $249 million to U.S. regulators to settle certain issues related to abuses in the bank’s foreclosure practices in the U.S.

The American division of the U.K. banking giant HSBC Holdings reached a settlement in this regard with the Federal Reserve Board and the U.S. Office of the Comptroller of the Currency. Under the agreement, HSBC Holdings PLC (ADR) (NYSE:HBC) will pay $96 million for some homeowners who suffered on account of improper foreclosure practices by the bank in 2009 and 2010. In addition, the bank will also give $153 million to offer other assistance and loan modifications. According to regulators, approximately 112,000 homeowners will benefit from this settlement.

In 2011, U.S. regulators had ordered a review of foreclosure papers of several mortgage services after finding widespread irregularities in the processing of such loan files. This settlement with HSBC Holdings PLC (ADR) (NYSE:HBC) resulted from such reviews of improper foreclosure files, whereby agencies required largest mortgage servicers in the U.S. to hire consultants to examine thousands of foreclosure files for defects.

As a result of the settlement, HSBC Holdings PLC (ADR) (NYSE:HBC) expects to book a $96 million pretax charge in the fourth quarter of 2012. The bank added further that it was satisfied having reached the settlement on the issue and that it hoped to provide for the loan assistance through the existing reserves the bank has.

The latest settlement brings the total payout by HSBC Holdings PLC (ADR) (NYSE:HBC) over foreclosure and related probes by the U.S. authorities up to $9.3 billion.

Just last week, several large banks, including Wells Fargo & Co. (NYSE:WFC), Bank of America Corp. (NYSE:BAC), Citigroup Inc. (NYSE:C) and JPMorgan Chase & Co. (NYSE:JPM), entered a settlement with U.S. regulators, offering to pay about $8.5 billion over similar accusations and in exchange seeking an end to the regulatory probe.

Shares of HSBC Holdings PLC (ADR) (NYSE:HBC) were down by 0.11% to close at $55.30.

Shares of Wells Fargo & Co. (NYSE:WFC) were down 0.29% to close at $34.93

Shares of JPMorgan Chase & Co. (NYSE:JPM) were up by 0.04% to close at$46.46

Lisa Johnson

Lisa Johnson is an award-winning journalist, host, author and critic, who has appeared as an expert on the CBS Early Show, NBC s Today Show, Dr. Phil, CNN, CNBC, Fox News, CNBC, Bravo and many more. Her work has been featured in The Wall St. Journal, the New York Times, Forbes, Oprah.com, AOL and numerous other media outlets. She has authored three books from major publishers