Posted on Thursday, March 17, 2011
HSBC Holdings PLC has suspended all foreclosure actions in the United States, according to the company’s annual regulatory filing with the Securities and Exchange Commission (SEC).
HSBC says it decided to temporarily halt foreclosure proceedings after examinations by federal regulators uncovered what the company described as “deficiencies” in its handling of legal paperwork related to foreclosure cases.
HSBC is headquartered in London and is Europe’s largest bank. It operates in the United States as HSBC Finance and HSBC Bank USA, both of which were subject to the official investigations involving mortgage servicing practices and foreclosure processing.
HSBC says it received cease-and-desist letters from both the Federal Reserve and the Office of the Comptroller of the Currency (OCC) which outlined problems in the company’s processing, preparation, and signing of affidavits and other documents supporting foreclosures, and in HSBC’s management of third-party law firms retained to carry out foreclosures.
“Management is reviewing foreclosures where judgment has not yet been entered and will correct deficient documentation and re-file affidavits where necessary,” HSBC said in its annual report. “We have suspended foreclosures until such time as we have substantially addressed noted deficiencies in our processes.”
HSBC said it is currently in discussions with the Federal Reserve and the OCC regarding the terms of the cease and desist orders, which prescribe actions to address the deficiencies noted in the joint examination, and the company expects consent orders to be finalized soon.
In addition, HSBC said it could face fines and civil money penalties imposed by the regulators and federal agencies.
HSBC is among 14 major servicers subject to the regulatory probe that could face sanctions and fines for faulty foreclosure procedures. Bank of America, Citigroup, and Wells Fargo have also disclosed in regulatory filings that they could face similar enforcement actions.
By: Carrie Bay, DSNEWS