HSBC borrowers to begin receiving payments in $470M settlement

Attorney General Mark R. Herring
Attorney General Mark R. Herring

RICHMOND, Va. (WAVY) — The Office of Attorney General Mark Herring announced Friday that former borrowers of HSBC Mortgage will begin receiving settlement payments in the coming weeks.

HSBC reached a national settlement with Virginia and 48 other states, following an investigation into alleged violations of mortgages and foreclosure procedures.

Herring’s office says the settlement — which totals $470 million — made $59.3 million available for more than 74,000 borrowers across the country who lost their homes.

Authorities say HSBC routinely signed foreclosure-related documents outside the presence of a notary public and without “personal knowledge that the facts contained in the documents were correct.”

According to the terms of the settlement, HSBC was to pay $40.5 million to settling federal parties. The bank was expected to put the remaining $370 million toward consumer relief.

Authorities say HSBC was expected to lower the principle on mortgages for borrowers who are at risk of defaulting, reduce mortgage interest rates and forgive forbearance — among other forms of relief.

Eligible Virginia borrowers include those who had mortgages serviced by HSBC, and lost their homes to foreclosure between Jan. 1, 2008 and Dec. 31, 2012.

More than 2,100 Virginians who were harmed by HSBC’s practices will be getting checks of $1,200, according to Herring’s office.

Herring sent claim forms to Virginia borrowers last August — with a filing deadline of Nov. 15, 2016. Nearly 68 percent of affected borrowers reportedly filed a claim.

Herring’s office says checks will begin to be distributed Feb. 17.