Feb. 06--HSBC borrowers in New Jersey will benefit from a $470 million settlement of a lawsuit over the lender's handling of mortgage loans following the housing meltdown, the state said Friday.
The settlement between global bank HSBC, the federal government and 48 states includes a $100 million payout. Of that, more than $59 million is designated for payments to the lender's borrowers in New Jersey and across the country for past foreclosure abuses, the New Jersey Attorney General's office said in a statement.
It also designated another $370 million in consumer relief, including loan modifications and other help for borrowers who need assistance. Other terms include the imposition of mortgage servicing standards, and the assignment of oversight authority to an independent monitor to ensure compliance.
"This settlement holds HSBC accountable for its past abusive, unacceptable business practices and provides direct relief to New Jersey borrowers," said acting Attorney General John J. Hoffman in a statement. "In the future, HSBC must treat its borrowers more fairly than it has in the past and an independent monitor will help to ensure that happens."
All told, the state said the settlement will change the way HSBC services mortgage loans, and handles foreclosures. It will prevent past abuses, such as robo-signing of documents, improper documentation and lost paperwork.
About 345 New Jersey consumers who had mortgage loans serviced by HSBC encountered servicing abuses by the company and lost their homes to foreclosure between Jan. 1, 2008 and Dec. 31, 2012, the state said. Those borrowers will be eligible for payment from the $59.3 million fund.
The payment to individual borrowers will depend on how many file claims. Eligible borrowers will be contacted about how to qualify for payments.
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