International bank HSBC (HBC) signed onto an agreement that effectively ends the companies’ review of questionable foreclosure practices.
Rather than using an independent review process already in place, the bank will address the issue through a one-time settlement with impacted homeowners.
The mega bank is joining 12 other servicers that already ended independent foreclosure reviews by opting to solve legacy foreclosure processing claims through a cash settlement.
HSBC alone will pay $249 million in both direct cash payments and foreclosure assistance to borrowers harmed by sloppy or questionable foreclosure practices, the Office of the Comptroller of the Currency said Friday.
Of those funds, $96 million will go to eligible borrowers, while $153 million will cover loan modifications and deficiency judgments.
The Federal Reserve and OCC released similar deals with other major servicers, including Aurora, Bank of America (BAC), Citibank (C), Goldman Sachs (GS), JPMorgan Chase (JPM), MetLife Bank (MET), Morgan Stanley (MS), PNC (PNC), Sovereign, SunTrust (STI), U.S. Bank (USB) and Wells Fargo (WFC).
With HSBC added to the pile of settling firms, 4.2 million borrowers will receive about $3.6 billion in cash to be distributed among them. Another $5.7 billion will be used to offer mortgage assistance.
Federal regulators moved to the one-time settlement approach after finding the foreclosure review process too costly and inefficient.