As part of the 2009 financial crisis, many banks gave out bad mortgages. However, the damage did not stop there. The banks also foreclosed on many Americans in 2009 and 2010 incorrectly citing federal and state guidelines in illegal practices.
Now, the US division of HSBC will pay out a $249 million settlement. The bank was ordered to review its mortgages on a loan-by-loan basis to determine how many loans and which loans were mishandled and consequently foreclosed. The bank determined that this process was too slow and costly, so it, along with other banks, agreed to settle with the US Office of the Currency Comptroller and the Federal Reserve Board, as reported by Thomson Reuters News and Insight on January 18, 2013.
This bank will pay $96 million in cash in the settlement and the rest of the $249 million will be used to help homeowners. It is estimated that 112,000 homeowners and former homeowners will receive some form of assistance including but not limited to cash, loan forgiveness and loan modifications. It is hoped that these payouts will help those affected by certain HSBC misdeeds.
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