Attorney General Morrisey announces multi-state settlement with mortgage provider

West Virginia Attorney General Patrick Morrisey announced Monday a multi-state agreement with banking and financial services provider HSBC that will change the company’s servicing standards and provide restitution to affected consumers.

The agreement was the result of a joint civil action filed by the U.S. Department of Justice, 49 states and the District of Columbia for misconduct related to their origination and servicing of single-family residential mortgages.

“We are pleased to once again partner with a large, bipartisan coalition to protect consumers against unscrupulous business practices.” Attorney General Morrisey said.

The West Virginia Attorney General’s Consumer Protection Division received 21 complaints against HSBC since 2011. Of those filings, five were resolved, 12 closed and four remain pending.

This settlement will allow 355 West Virginia consumers to receive up to $1,400. Another 1,928 state consumers will be eligible for a rate reduction, modification and/or some decrease in their loan.

HSBC, as part of the broader settlement, will pay a $40.5 million fine to the Justice Department with an additional $59.5 million placed in escrow for consumers affected by its practices.

The complaint alleged HSBC’s conduct resulted in the issuance of improper mortgages, unfair and deceptive loan servicing practices, premature and unauthorized foreclosures, violation of homeowners’ rights and protections, use of false and deceptive documents and wasted taxpayer funds.

HSBC will be monitored until Dec. 31, 2016 and will be required to issue a final quarterly report, the agreement states.

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