NH Attorney General Joseph A. Foster announced Feb. 12 that a $470 million joint state-federal settlement with mortgage lender and servicer HSBC has been reached to address mortgage origination, servicing and foreclosure abuses. The settlement provides direct payments to NH borrowers for past foreclosure abuses, loan modifications and other relief for borrowers in need of assistance, and grants oversight authority to an independent monitor.
The settlement includes NH and 48 other states, the District of Columbia, the U.S. Department of Justice (DOJ), the U.S. Department of Housing and Urban Development (HUD) and the Consumer Financial Protection Bureau (CFPB).
Loan Modifications & Payment to Borrowers
The HSBC agreement requires the company to provide certain NH borrowers with loan modifications or other relief. The modifications, which HSBC chooses through an extensive list of options, include principal reductions and refinancing for underwater mortgages.
Approximately 515 eligible NH borrowers are eligible for a payment from the $59.3 million fund as their loans were serviced by HSBC and lost their home to foreclosure from January 1, 2008 through December 31, 2012 and encountered servicing abuse.
The borrower payment amount will depend on how many borrowers file claims. Eligible borrowers will be contacted about how to qualify for payments. HSBC decides how many loans and which loans to modify, but must meet certain minimum targets.
Mortgage Servicing Standards
The settlement’s consumer protections and standards include:
• Making foreclosure a last resort by first requiring HSBC to evaluate homeowners for other loss mitigation options;
• Restricting foreclosure while the homeowner is being considered for a loan modification;
• Procedures and timelines for reviewing loan modification applications;
• Giving homeowners the right to appeal denials;
• Requiring a single point of contact for borrowers seeking information about their loans and maintaining adequate staff to handle calls.
Current Issue - May 2024