Connecticut has joined a $470 million joint state-federal settlement with mortgage lender and servicer HSBC to address mortgage origination, servicing, and foreclosure abuses.
Connecticut joins 48 other states, the District of Columbia, U.S. Department of Justice, the U.S. Department of Housing and Urban Development and the Consumer Financial Protection Bureau in today’s settlement.
Attorney General George Jepsen said the settlement provides direct payments to Connecticut borrowers for past foreclosure abuses, loan modifications and other relief for borrowers in need of assistance. It also provides for oversight authority for an independent monitor to ensure mortgaging standards are met.
Roughly 643 Connecticut borrowers whose loans were serviced by HSBC and who lost their home to foreclosure from Jan. 1, 2008 through Dec. 31, 2012, and encountered servicing abuse will be eligible for a payment from the national $59.3 million fund for payments to borrowers. The borrower payment amount will depend on how many borrowers file claims. Eligible borrowers will be contacted about how to qualify for payments.
The HSBC agreement also requires the company to provide certain borrowers in Connecticut with loan modifications or other relief. The modifications include principal reductions and refinancing for underwater mortgages.
